17 February 2015
MEDIA RELEASE
Opus lifts dividend by 13% despite challenging markets
Opus International Consultants delivered strong top line growth in 2014 with revenue up 17% on 2013 to $539.6m. NPAT was
up 15% to $26.2m and Return on Equity was 18.4%, compared with the NZX 50 average of 11.5%. Operating cash flow remained
strong at $32.1m, up 29%, and the full-year dividend increased by 13% on the prior year.
“However, this result was significantly impacted by accounting adjustments and a previously reported significant project
loss of $4.5m,” said Chairman Kerry McDonald.
EBIT was $37.4m, up 9%, but underlying EBIT of $32.6m was down 2.8% on the prior year; affected by weaker performances
in New Zealand and Australia.
The difference between EBIT and underlying EBIT reflects a deferred consideration release of $11.5m in Canada and an
impairment of goodwill adjustment of $6.7m in Australia.
The deferred consideration release in Canada relates to the recent Stewart Weir acquisition, which is performing well
after the difficult winter weather conditions early in the year. Importantly, the gain is not simply an accounting
windfall but reflects the benefits of having excellent people in key roles and an astute approach to risk management in
negotiating the acquisition agreement.
In Canada, revenue increased by 133% to $137.3m and underlying EBIT increased by 41% to $7.5m. “Despite adverse weather
conditions that impacted Opus Stewart Weir in the first half of the year, the business performed in line with
expectations,” said Chief Executive, Dr David Prentice. “Opus Stewart Weir delivered revenue of $111.8m and underlying
EBIT of $5.3m. We also saw substantial improvement across the existing Canadian business with EBIT up 21% on the
previous year. Looking forward, growth in this market is likely to be affected by oil and gas prices, which are being
very closely monitored.”
The UK business had its best financial performance to date with revenue up 26% to $49.3m and EBIT up 80% to $1.1m. “The
results are underpinned by a recovering UK economy and opportunities in core growth sectors, including rail, asset
management and highways work,” said Dr Prentice. “The UK result is pleasing and we are well placed to leverage our
position in 2015, and build on the market penetration gained in 2014.”
The New Zealand business experienced challenging market conditions as a result of increased competition, tighter margins
and a reduction in government spending. While revenue increased by 1% to $287.5m, EBIT decreased by 8.1% to $28.5m
mainly as a result of a large project loss.
“Despite the challenging environment, we have secured a number of strategic commissions, including six out of nine
significant long term Network Outcome Contracts for the NZ Transport Agency and we are leveraging new opportunities in
the Pacific,” said Dr Prentice. “The Christchurch earthquake rebuild continues to be a key component of near-term
economic activity but other sections of the economy have some momentum.”
The Australian performance reflected a slowdown in the resource and infrastructure sectors with revenue reduced by 15%
to $64.4m which equated to an EBIT loss of $675k. “Market conditions are expected to remain challenging for some time,”
said Dr Prentice. “The impairment is a pragmatic reflection of a continuing weak economic outlook. In addition, we are
pursuing a number of strategic project opportunities as well as driving greater efficiencies throughout the business.”
Mr McDonald says the outlook across markets is mixed, presenting challenges and opportunities for 2015. “The level of
economic uncertainty is a key consideration but our strategy of market diversification is proving prudent in managing
risk and leveraging new opportunities.”
Opus has confirmed a final interim dividend of 4.9 cents per share, which is fully imputed taking the full year dividend
to 8.9c up 13% on prior year.
ENDS