Coffey Expects a Good Half Year Result

Coffey International (COF) has revealed that it expects its best ever half year results. The company said its balance sheet was strong, with long term lending facilities in place. Net debt at 31 December 2008 had reduced under $92 million on the back of strong operating cashflows due to substantial growth in revenue. It expects an operating profit of between $29 million and $31 million for the first half of fiscal 2009. Shares of the engineering services provider rallied almost 15% on the news.

The directors have declared an increased fully franked final dividend of 7 cents per share, up from 5 cents for the corresponding period, and representing 69% of earnings per share before amortisation. This dividend is consistent with the company’s policy of 60 - 80% payouts.

Commenting on the issue managing director of Coffey Roger Olds said, “The 58% profit growth reflects both organic growth in our consulting and project management businesses and a strong performance from the six businesses we have acquired this financial year”. “The markets for our multi-specialist services continue to be buoyant. As well as growing domestically, in the past year we have established a significant presence in several international markets which offer substantial growth prospects, including the UK, New Zealand and South Africa,” he added.

Several good project wins by Coffey International Development in the past six months reflect the good strategic work that has been done in this business, and it is now well placed to deliver good profit growth as well as becoming a global player in this market. Roger said the outlook for continuing growth in Coffey’s consulting and project management divisions remained strong, with investment in the physical infrastructure, resources and development markets expected to be strong for the foreseeable future. The company completed an $80 million 2 for 7 non-renounceable rights issue in December 2006, thereby creating an excellent financial platform to fund its future growth strategy.