In accordance with Listing Rule 3.1, find attached a press release regarding Watpac s half year results.

Transcription

1 22 February 2011 The Manager Company Announcements Office ASX Limited 4 th Floor, 20 Bridge Street SYDNEY NSW 2000 Dear Sir, RE: 31 December 2010 Half Year Results In accordance with Listing Rule 3.1, find attached a press release regarding Watpac s half year results. Yours sincerely, WATPAC LIMITED Doug McAlpine COMPANY SECRETARY

2 22 February 2011 Watpac Limited expects improved second half and strong outlook for FY12 Watpac Limited ( Watpac ) (ASX: WTP), a diversified construction, civil and mining, and property group today announced an after-tax profit for the half year to 31 December 2010 of $4.3 million. This result is within the profit guidance range released to the market on 18 January As indicated in that announcement, the Group s result is lower than the previous corresponding period primarily as a consequence of the sustained unseasonal wet weather in Queensland and Victoria during the quarter up to 31 December The Directors expect an improved second half for FY11 and believe the Group is well positioned for FY12 with record contracting work in hand. The key indicators in respect of the Company s financial performance for the half year are as follows: % Change Total contracting work in hand ($ millions) 1,770 1, % Total revenue ($ 000s) 644, , % Operating profit before tax ($ 000s) 5,687 14,064 (59.56)% Income tax benefit/(expense) ($ 000s) (1,422) (3,606) (60.57%) Operating profit after tax ($ 000s) 4,265 10,458 (59.22)% Change Earnings per share (cents) (4.34) Interim dividend per share (cents) (3.0) Return on shareholders funds (percent) 1.45% 3.5% (2.05)% Page 1 of 3

3 The Board has declared a fully franked dividend of 1.5 cents per share for the six-month period. Whilst lower in dollar terms than the previous corresponding period, the dividend reflects continuation of the Company s historical payout ratio and reinforces the Directors confidence in the strong long term earnings expectations for the Company. The dividend reinvestment plan remains in place. Greg Kempton, Watpac Managing Director said, The business remains in sound financial condition and the Company expects to report a stronger second half. In saying that however, I expect the abnormal wet weather conditions experienced on the east coast of Australia to result in a weaker financial performance in the contracting sector in FY11 when compared to FY10. Watpac s diversified operations and strong forward order book finds us particularly well positioned though for FY12 and beyond. Contracting The Group was awarded $628 million of contracting work in the quarter to 31 December The Company s quarterly work in hand media release is attached to this announcement. The Group s work in hand position is currently a record $1.8 billion. We have continued to secure high quality building, civil and contract mining projects during the period. Our brand reputation continues to grow interstate having secured the $353 million One Central Park residential project for Frasers Property in Sydney and the $102 million Eastern Plaza Development at the Melbourne Tennis Centre. Our entry into the South Australian construction market has also been successful securing the $75 million Adelaide Airport Landside project. The Company s Civil & Mining business on the East Coast was impacted by bad weather in the first half, but mining work in Western Australia is being delivered in accordance with Watpac s contractual obligations, on time and on budget. Page 2 of 3

4 The mining services sector represents a huge growth upside for the Group, but we must ensure that growth is delivered in a measured way. Mr Kempton said. Property Mr Kempton reiterated that the Company s property book was comprised of quality assets that were strategically well located in South East Queensland. There is significant value to be realised from the strategic disposal or development of the Group s property portfolio, but for the moment, supply and demand side forces are not operating to allow those assets to be realised. Mr Kempton said. Whilst investor yield expectations on commercial and industrial property are not helpful for developers, it is encouraging to see financiers are more positive about the sector. The Directors continue to apply a conservative accounting treatment in respect of property and have directly expensed property holding costs and interest of $6.3 million during the six month period. Notwithstanding these challenges, the company has delivered on its strategy to reduce its exposure to property by completing the sale of the Waterloo Stage 1 Commercial Office tower and the Coolum Lot 146 Industrial assets in Queensland at book value. It is expected that the 8 Australia Avenue Commercial Office tower in New South Wales will be disposed prior to 30 June For further information, please contact: Name: Greg Kempton Title: Managing Director Contact: Note to editors: Watpac is an ASX-listed company specialising in construction, civil engineering and mining, specialty services (including refurbishments), and property development. We have offices in Brisbane, Townsville, Sydney, Melbourne, Adelaide, and Perth. More information can be found at Page 3 of 3

5 Media Release Work in Hand Update Quarter ended 31 December 2010 Watpac s Construction, Civil & Mining, and Specialty Services divisions were awarded the following projects the second quarter of 2010/2011: Watpac Civil & Mining Arndell Reserve, Wyndham Vale, Vic ($1.8M): The construction of a cricket/football oval, including construction of a synthetic football pitch to FIFA specifications and floodlighting to the entire complex. BBP Stage 3A, Adelaide Airport, SA ($677K): Industrial subdivision works for the Burbridge Business Park Stage 3A, including sewer, stormwater, and electrical reticulation works. Since the end of September 2010, Watpac has been awarded more than $628 million worth of projects across its contracting businesses throughout Australia. As a result, our work in hand is now in excess of $1.8 billion. One of the most significant projects awarded to the Company is the construction of One Central Park in the Sydney suburb of Chippendale. The $353 million project is the first residential stage of the $2 billion Central Park precinct being developed by Frasers Property Australia. The East tower at One Central Park will comprise 33 storeys, while the West tower will be 16 storeys high, delivering 623 residential units above a fivelevel retail and recreation podium. The complex will also include a further five levels of basement car parking to cater for 1,200 vehicles. Both towers will feature extensive vertical gardens, creating an appearance of green living walls on the exterior of the buildings. A heliostat reflector system will see mirrors reflect sunlight into the void space between the two towers and adjoining gardens. The development will aim to achieve minimum 5 Star Green Star ratings for design and building under both the Multi Unit Residential v1 and Retail Centre v1 Green Building Council of Australia rating systems. On-site tri-generation will be utilised for power, and water recycling, a blackwater treatment plant, and passive solar design have also been included to ensure Central Park achieves exceptional standards of environmentally sustainable design. One Central Park is expected to be completed in Caroline Springs Train Station Access Road, Caroline Springs, Vic ($627K): Construction of a 170m asphalt access road that will link surrounding roads with the future train station. Around 3,500m3 of imported fill will be brought to site, and the works will also include the installation of stormwater drainage and culverts. Foote Street, Albert Park, Melbourne, Vic ($185K): Demolition of a suburban street, converting the space into a landscaped park that links the Watpac-constructed Albert Park Secondary College with the neighbouring gas works park. Holmesglen TAFE civil works, Morabbin Campus, Vic ($193K): Civil works including exposed pavement and concrete retaining walls. Continued over page...

6 Watpac Civil & Mining (continued) Kennedy Development Road, Lynd to Hughenden, Qld ($3.3M): Following the successful Kennedy and Gregory Development Road upgrades, Civil & Mining was awarded a further package of works involving another portion of the Kennedy Development Road. Laureate Apartments Albert Park, Melbourne, Vic ($735K): Landscaping works for a prestigious residential development in inner-city Melbourne. NKW Hydrogen Plant civil works, Kwinana, WA ($3.4M): Contract with BHP Billiton for the construction of civil works for a new hydrogen plant at the Kwinana Nickel refinery. RMIT Bowen Street Tension Structures, Melbourne, Vic ($373K): After the successful completion of the RMIT University Lawn project, the team was awarded the civil and landscaping works to redevelop Bowen Street on the RMIT University campus. RMIT Building 13 Landscape Works, Melbourne, Vic ($1.86M): Soft and hard landscaping works surrounding Building 13 RMIT s city campus. Road reconstructions, Adelaide suburbs, SA ($1.2M): This project involves extensive reconstruction works to roads in Glen Ira, Fife, and Hughes in Adelaide. SSWA Binningup Inground Pipework, WA ($3.5M): An extension to Watpac s existing contract with the Southern Seawater Alliance Desalination Project, comprising road works, drainage, and more pipe works. Watpac Construction Adelaide Airport Landside Infrastructure project, SA ($75M): Watpac s first construction job in South Australia, this project comprises a five-level multi-deck, 2,000-space car park catering for around 7,000 vehicle entries per day. Other works include the construction of a pedestrian plaza, road works, and improved access for taxis, limousines, and busses. In late 2010 Watpac was awarded the $110 million Eastern Plaza construction project at Melbourne Park, the home of Australian tennis, extending the Company s sporting credentials even further. The design and construct project comprises Stage 1 of the overall $363 million redevelopment of the Melbourne Park precinct. The project will include the construction of a new public plaza and gathering space, eight new indoor courts and 13 outdoor courts for elite training and general public use, and state-of-the-art player facilities including a gymnasium, lounge areas, change rooms, and coaching facilities. Watpac will also undertake the refurbishment and construction of new entries to Hisense Arena, and construction of additional parking and a footbridge linking Melbourne Park to the Melbourne Rectangular Stadium. Camberwell Grammar School Senior School Early Works, Canterbury, Vic ($549K): Partial demolition of an existing building and installation of a new lift shaft and bracing walls. La Trobe Institute of Molecular Science, Melbourne, Vic ($66M): Approximately 11,000m 2 of new teaching and research laboratories over six levels, along with associated connection works to adjacent buildings, external landscaping and civil works, and campus service connection works. Sleeman Sports Complex BMX Facilities, Brisbane, Qld ($2.7M): Construction of an Olympic-standard BMX track as part of the Sleeman Sports Complex upgrade. The track will be the first of its kind in the southern hemisphere. Watpac Specialty Services Baiada Chiller Extensions, Mareeba, Qld ($630K): Watpac is undertaking the detailed design works for 10 Baiada Poultry (Steggles) projects across Australia ahead of construction. This project involves the construction of an extension to the chilled storage and palletisation area. Baiada Power Upgrade, Adelaide, SA ($500K): Design and coordination of the electrical upgrade of Baiada s Adelaide facility, critical to a major upgrade of the client s refrigeration and processing equipment, and likely building expansions later in Brisbane Racing Club Fire Safety Upgrade, Brisbane, Qld ($2M): Installation of sprinklers, emergency lighting, detection and early warning systems throughout the heritage-listed John Power and Members stands. Watpac Limited Level 1, 12 Commercial Road Newstead Qld 4006 Tel: