COA coates hire limited

coa outlines strategy

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    Coates Hire (COA) said Friday it had completed its 5-month strategic review led by the group's new managing director, Malcolm Jackman. The equipment hire company said it would stick to its strategy of aiming to grow profits throughout the business cycle but would not diversify to reduce its earnings volatility.

    "Cyclicality is inherent to our business, and there is no silver bullet?strategy or acquisition capable of changing that," chief executive Malcolm Jackman said at a media briefing.

    The review, which was conducted with senior Coates?executives and has been approved by the board, affirmed that the company will take an "evolutionary, not revolutionary" strategy to generating growth.

    "We are aiming to consistently grow profits throughout the cycle by demand planning, careful pricing and a focus on asset utilization, while debt reduction should see our shareholders rewarded with consistent dividend," he added.

    Coates Hire appointed Jackman in February this year shortly before posting a 107% increase in interim net profit to $15.3 million on the back of its acquisition of Brambles Industries?(BIL) Wreckair business. According to Multex Global Estimates, analysts are forecasting it to post a profit of $34.2 million for the year ending 30 June 2003.

    Jackman also held out the prospect of acquisitions, saying it had developed a disciplined, comprehensive approach to evaluating and digesting potential purchases. In the last 10 years the group has acquired no less than 23 companies.

    "Going forward we will continue to use the approach that has served the Company so well in the past."

    Coates operates across Australia, the UK and Indonesia under brands including Coates Hire & Wreckhair, Coates Shorco Sykes, Coates Prestige, Coates Conrent, Coates Indonesia and Coates Rentair.
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