On Tuesday Transpacific Industries Group (TPI) told the markets that 91% of the banks involved in a $300 million-plus tranche of credit had signalled their willingness to extend it for a year from this December.
Given the credit crunch’s impact and the growing reluctance of the banks to lend, that was a vote of confidence, especially as TPI had only updated the market in June on this tranche, its possible size and what it wanted.
It said in Tuesday’s statement that the banks had seen the provisional 2008 results and projections for the subsequent years and executive chairman Terry Peabody said thanks.
Yesterday TPI released those results to the market and yet investors were a bit cool.
The shares fell 25 cents to $6.95, well above the $5.77 low but well down from the $11.78 high.
On the face of it the figures were more than solid; annual profit up 70% and says it expectations of achieving double digit growth this financial year.
Net profit for the year to June 30 rose to $175.25 million, from $103.06 million, after sales revenue rose 70% to $2.20 billion.
Underlying earnings before interest, tax, depreciation and amortisation was up 79% at $541 million.
Transpacific said its result was boosted by the successful integration of acquisitions, including Cleanaway group from Brambles.
"Transpacific is the market leader and well positioned for solid organic growth with significant new initiatives underway," it said.
"Previous group organic growth targets remain – we expect to achieve double digit growth for fiscal 2009."
The company said it would achieve that growth (it didn’t indicate what double digit growth meant) by using " Operating cash flows to be used to repay debt; excess land assets to be developed as opportunities arise (e.g. Tullamarine Landfill); TPI footprint and presence established – Continued focus on organic growth and expansion of all services; strategic focus on Recycling and Environmental Services.
The "impact of increased fuel prices offset by price rises/levies and Energy Division oil sales; NZ business benefiting from organic; expansion and recent new tender wins; previous group organic growth targets remain
"We expect to achieve double digit growth for FY09; investigation and development of international market opportunities via strategic alliances; focus on profitable strategic and synergistic acquisitions (Funded by Equity where possible); continued focus on cold starts where opportunities arise; forecast interest rate decreases will assist NPAT growth."
Transpacific declared a final dividend of 10.1 cents, up from 6.7 cents in the previous corresponding period, taking the total for the year to 18.1 cents.
Unlike the less than enthusiastic reception for Transpacific’s profit, the market gave the thumbs up to industrial building services and refrigeration company Hastie Group after it reported a 71% surge in net earnings. The shares rose 10.7%, or 26 cents to $2.69.
Hastie reported a net profit of $37.96 million for the year ended June 30, 2008, up from $22.2 million in the prior year and with solid signs for another good year.
Dividend was lifted to 16 cents, 39% up on 2007’s 11.5 cents with the payment of a 9 cents a share final.
Chief executive David Harris said contract wins were continuing to increase and Hastie’s order book was ahead of the financial year just ended.
"Tendering activities and contract wins are continuing to increase, with a number of significant contracts secured over the past six months in all our businesses and across our three regional hubs in Australasia, UK and Ireland, and the Middle East," Mr Harris said in a statement.
"Our order book remains strong at sustained margins and significantly ahead of last year.
"Despite uncertainties in the global environment, we are expecting earnings per share in the range of 35.0 to 38.0 cents per share, for 2008-09."
In 2007-08 earnings per share grew by 53 per cent to 30 cents.
That would see earning up by around $6 million to $10 million.
The company’s total sales revenue rose 63% to $1.27 billion and earnings before interest and tax (EBIT) also increased by the same amount to $67.5 million.
"This excellent result reflects the growing strength of Hastie’s operations in Australasia, the UK and Ireland, and the Middle East, and our increasing success in winning substantial contracts," Mr Harris said.
"Hastie said it was strongly positioned in current market environment with a leading position in Australasia and UK/Ireland; it was expanding its Middle East and International presence; it had a record order book at sustained margins across all divisions; it was enjoying buoyant bidding activity with continuing demand in its core sectors; the balance sheet had the capacity to fund continued growth; it had a secure debt position (with no debt falling due for three years); it had a highly skilled, stable and experienced workforce and the strong “managed growth” expected to continue with annualised sales "approaching $2.0 billion"
The company said the besides the growth in eps expected in 2009, the company has a "positive view for further growth in FY10."
