Australia: Leighton Establishing Solid Platform for Future Profitability

At Leighton Holdings’ Annual General Meeting in Sydney, the Chairman Mr Bob Humphris OAM said that the Board was focused on further improving every aspect of the Company’s operations, after the Group’s position strengthened during 2012.

Mr Humphris said: “The Leighton Group has a market position that is the envy of our peers. We are committed to delivering improved performance from our existing capital structure and sustainable returns to shareholders. And, I am pleased to say, we are making good progress on doing just that. We are establishing a solid platform for improving future profitability.

“We are working to identify and appoint four new independent Directors with the skills and experience to contribute to the further development of Leighton. Our focus is on the quality of our Directors. We expect to be in a position to announce appointments before the end of June.”

Chief Executive Officer Mr Hamish Tyrwhitt said the first quarter results, delivered in a challenging macroeconomic environment, indicated the Company was on track to deliver this year’s forecast.

“Leighton’s strength lies in its size, diversity and the international reach of our portfolio. Much attention has been given to the cancellation or delay to large resource-related capital projects in Australia. Leighton earned approximately 5% of total revenue last year from the construction of coal and iron ore projects. Where we did benefit was from the huge investment in the gas sector.”

Continuing its ‘stabilise, rebase and grow’ strategy, Mr Tyrwhitt said Leighton’s priorities were to improve profitability, strengthen the balance sheet and focus on capital management. The Group will target a sustainable net margin of 3 to 4% by working smarter and reducing costs. He highlighted the establishment of a centralised contract mining equipment company, named FleetCo, and the development of Centres of Excellence as key initiatives.

“The Centres of Excellence will house a set of specialist competencies that we have recognised as an important source of value creation. In essence, we are looking at what we do best and what cannot easily be replicated by our competitors, in order to frame where and how we grow.

“Another opportunity is in the development of a broader range of funding for infrastructure. Governments cannot fund this demand alone and the private sector needs to play an increasing role. With innovative financing and delivery models, governments will be able to access funding sources to help meet the estimated US$60 trillion in global infrastructure investment required by 2030. This will be a great opportunity for Leighton within its geographic footprint.”

Mr Tyrwhitt said Leighton was uniquely placed as the only construction company with a full footprint across Asia and it would protect its strong position. Further into the future, the Group would expand into growing regions such as South East Asia, India and Sub-Saharan Africa.

Mr Tyrwhitt said: “It is clear that we need to move our focus from an Australian-centric approach to one where we export our skills to markets where our services are valued and where we can add value. By delivering excellence on the global stage, we can position the Group for relevance and resilience.”

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LNG World News Staff, May 21, 2013; Image: Leighton

Leighton establishing a solid platform for future
profitability