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hastie exceeds

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    Hastie exceeds prospectus forecast with EBITA of $25 million
    Sydney: Hastie Group Limited, Australasia's leading air conditioning and refrigeration systems group, today
    announced pro forma earnings before interest, tax and amortisation (EBITA) of $25.0 million for the year to 30
    June 2005, five per cent above its prospectus forecast of $23.8 million.
    Compared to the prior year, pro-forma EBITA increased 24 per cent over 2004 ($20.1 million).
    The directors have declared a fully franked dividend of 2.4 cents per share payable on 19 October 2005 to
    shareholders on the register at 19 September. A dividend re-investment plan will apply with shares issued at a
    discount of 2.5 per cent from the volume weighted average price.
    Consolidated
    Results summary Actual
    30 June 2005
    $ million
    Prospectus
    30 June 2005
    $ million
    Change %
    Sales 407.4 392.9 3.7
    EBITA (earnings before interest, tax and amortisation) 25.0 23.8 5.1
    Managing Director, Mr Jerry Mayco ck, said: “We are encouraged by the EBITA and revenue growth. This has
    been driven by strong organic growth in both the air conditioning and refrigeration businesses, as well as
    acquisitions during the year. The EBITA to sales margin of 6.1 per cent reflects successful project delivery and
    overhead cost management. With EBITDA interest cover at almost eight times, the company has the flexibility to
    take advantage of growth opportunities.
    “This has been a significant year for Hastie with our successful stock exchange listing in March 2005. The
    company has a dedicated board, an experienced and capable management team and a portfolio of businesses that
    are performing strongly.
    “Hastie now has a team of 1,540 people operating in 33 locations throughout Australia and New Zealand. This
    expanded geographical footprint gives us the ability to capitalise on the strong market conditions in the nonresidential
    construction, education, health and transport infrastructure sectors. Additionally, we are the only
    company that can offer a national air conditioning and refrigeration maintenance solution to customers with
    multiple sites.”
    Air conditioning
    Results summary Actual
    30 June 2005
    $ million
    Prospectus
    30 June 2005
    $ million
    Change %
    Sales 301.9 291.0 3.7
    EBITA 20.7 19.9 4.1
    Hastie's air conditioning division is the clear leader in Australia and New Zealand in the design, engineering,
    installation and maintenance of commercial ventilation and air conditioning systems. It has national networks and
    an overall market share of 16 per cent, with the next largest business holding a six per cent share.
    Projects completed during the year included the Hilton Hotel and Westfield Bondi Junction, Sydney; Freshwater
    Place, Melbourne; Adelaide Airport; and Pan Bio Pharmaceuticals, Brisbane. In January 2005 Hastie acquired
    leading Melbourne-based D&E Air Conditioning which contributed revenue of $70 million and added 250 staff.
    This business has given Hastie access to larger projects in Melbourne, offering growth opportunities in both
    installation and maintenance.
    Page 2 of 2
    2006 is expected to be another year of growth for the air conditioning business. The $12 million acquisition of
    M&H Air Conditioning, Newcastle, completed in July 2005, expands the business’ coverage into the central and
    northern regions of New South Wales, and is expected to contribute revenue of $30 million. Organic growth in all
    states will also increase revenue and earnings.
    Refrigeration
    Results summary Actual
    30 June 2005
    $ million
    Prospectus
    30 June 2005
    $ million
    Change %
    Sales 105.5 101.9 3.5
    EBITA 4.3 3.9 10.0
    Hastie's refrigeration division is a leader in the design, manufacture and installation of large-scale refrigeration
    systems with central plants servicing multiple refrigerated areas or cabinets. It has a 37 per cent share of the
    combined Australian and New Zealand supermarket refrigeration market.
    Revenue and earnings increased during the year, driven by enhanced product development, process improvements
    in manufacturing and improved sourcing of components and materials. The business was also successful in
    securing new contracts with independent supermarkets in Australia and New Zealand. Since year-end, the Austral
    division secured a tender to supply a trial of refrigeration cabinets to Sainsbury’s Supermarkets in the United
    Kingdom, highlighting the business’ worldwide competitiveness.
    Prospects for 2006 are encouraging with opportunities for growth in all markets. New store rollouts, refurbishments
    and merchandising initiatives by supermarket chains, liquor stores and convenience stores will be the main drivers
    of this growth.
    Outlook
    “Hastie’s maintenance operations in air conditioning and refrigeration represent a growing proportion of the
    company’s revenue, and expanding the company’s maintenance activities is a major focus for management during
    the year. From 1 July 2005, maintenance will be reported as a separate division,” Mr Mayc ock said.
    “The company expects to grow market share in the air conditioning and refrigeration markets, underpinned by a
    healthy order book and favourable market conditions in key sectors. Hastie will continue to evaluate acquisitions
    that complement existing operations, expand the company’s geographical presence, have a strong and committed
    management team, and make an immediate contribution to earnings.
    A move into other closely related building services that strengthen our offering to customers is under consideration.
    The company is also establishing an office in the United Arab Emirates to evaluate opportunities for its air
    conditioning business. That market is currently experiencing significant growth.
    “Hastie’s EBITA forecast for FY2006 of $25.8 million has been upgraded to approximately $28 million based on
    the expected contribution from M&H Air Conditioning and from current work in hand. The company will update
    shareholders on its progress at the Annual General Meeting in November,” Mr Mayc ock said.
    Hastie Group Limited has grown over 35 years from a Sydney air conditioning business into the leading air conditioning and
    refrigeration systems group in Australia and New Zealand. It has 1,540 employees based at 33 locations, and operates a
    business model which gives local management a high degree of responsibility for customer service and financial performance.
    Its customers include some of the largest construction companies, shopping centre groups, supermarket chains and facility
    managers. Hastie Group is an ASX 300 company and has a market capitalisation of $200 million (as at September 5, 2005).
    Issued by Hastie Group Limited
    For further information, please contact Jerry Mayc ock on (02) 9714 2180
    Media enquiries to Ben Jarvis, Financial & Corporate Relations (FCR) on 02 8264 1003 or 0413 150 448
 
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