AusGroup Profit Rises
AusGroup announced its results for the second quarter (2Q FY2014) and first half (HY2014) ended 31 December 2013.
AusGroup booked a gross profit increase of approximately 137% to AU$7.8 million (1Q FY2014: (loss of AU$20.9 million) for 2Q FY2014. This improved performance was on the back of increased activity levels within the group’s Maintenance Services and Fabrication divisions and delivered 11.4% gross margin across the portfolio of projects.
Cash and cash equivalents as at 31 December 2013 totalled AU$31.4 million, with no debt.
The group continues to maintain an improved pipeline of work heading into H2FY2014 with the group’s order book as at 11 February 2014 totalling AU$226 million.
As anticipated last quarter, the slowdown in the minerals mining sector has seen revenues softening into the future as compared to previous years. While the company expects that trend will continue, the next 12-24 months will see increased opportunities arising from LNG construction projects which should offer some balance.
The group continues to see significant interest coming from the mining and LNG customers for the provision of maintenance services as the market transition from Capex to Opex spend. The group strategy is to focus on expanding its maintenance offering which provide long term recurring revenue. This restructuring will also result in a lower cost based to provide improved profit margin quality.
In line with the current market conditions the group is restructuring that will result in a lower cost base so as to ensure an improvement in margin quality to remain competitive while continuing to expand its maintenance services offering.
Press Release, February 12, 2014