1
24 November 2009
Campbell Bros produces sound half year
performance
Brisbane-based diversified industrial company Campbell Brothers Limited (ASX Code: CPB)
today announced that the Group achieved net profit after tax of $38.26 million in the half year
to September 2009, in line with recent guidance provided to the market.
The result was down 33% on the previous corresponding period and was generated from
revenue of $400.91 million (down 12% on the September 2008 half).
Campbell Brothers Chairman, Geoff McGrath said the result represents a sound financial
performance in an uncertain economic environment during the period.
"
The fall in revenue and profit was largely due to reduced global demand in mineral
exploration markets for analytical testing services provided by the ALS Minerals division. All
other divisions of the ALS Laboratory Group produced improved revenue and profit
contribution compared with the September 2008 half year
"
.
"Recent data indicate there is stability and, in some regions, gr
owth returning to the markets
serviced by the Group", he added.
Directors have declared a partly franked (50%) interim dividend of 45 cents per share,
payable on all ordinary shares including new shares issued in November 2009 pursuant to
the Company's
one-for-six renounceable rights issue (2008: 50 cents, partly franked to 50%).
The dividend
will be paid on 16 December 2009 on all shares registered in the Company's
register at the close of business on 3 December 2009. The dividend reinvestment plan
discount will be 7.5 %.
Results of each of the Company's business
segments were:
Financial Results
Revenue
Contribution
In thousands of AUD
H12010
H12009
+ / -
H12010
H12009
+ / -
ALS Minerals
97,630
165,956
-41.2%
24,629
64,974
-62.1%
ALS Environmental
119,055
108,292
+9.9%
26,015
16,527 +57.4%
ALS Coal
31,180
27,805 +12.1%
8,502
5,445 +56.1%
ALS Tribology
15,435
7,494 +106.0%
2,683
931 +188.2%
Campbell Chemicals
79,137
81,940
-3.4%
4,074
5,216
-21.9%
Reward Distribution
61,300
67,717
-9.5%
2,140
2,343
-8.7%
Eliminations*
(2,831)
(2,846)
-
-
-
-
Total segments
400,906
456,358
-12.2%
68,043
95,436
-28.7%
Net profit after tax
38,259
57,044
-32.9%
*Intersegment revenue is generated by Campbell Chemicals from sales to other segments
asx/media
release
2
In revi
ewing the Company's results,
Campbell Brothers Managing Director, Greg Kilmister
said that the ALS Minerals business experienced a significant reduction in sample volumes
compared with the previous corresponding period as global exploration activity fell by
approximately 50 percent in response to tight credit conditions.
"
Whilst the contribution margin as a percentage of revenue fell substantially from the
previous year, the division's ability to react quickly in reducing its variable costs produced a
strong margin performance given the difficult market conditions.
"
The division experienced improving business volumes in the September 2009 quarter
"
, he
added.
The ALS Environmental division produced a strong result for the half year to September
2009, with the increase in revenue driven by both acquired and organic growth. Cost control
initiatives across all regions resulted in a significant improvement in contribution margin from
15.3 percent to 21.9 percent.
In relation to the ALS Coal business, Mr Kilmister said increasing levels of global export
activity driven by higher coal prices and improving industry sentiment provided the impetus
for a healthy performance across all regions.
"
The division maintained its focus on efficiency during the half year producing a strong
improvement in contribution margin on revenue. The African coal business rebounded from
a sluggish start to the year, and the new coal laboratory in North America is now fully
functional
"
.
The ALS Tribology business had the benefit o
f a full six months' contribution from its North
American business, Staveley Services (acquired August 2008) in the half year to September
2009.
"
When combined with organic growth in other regions this enabled the division to more than
double the half year revenue of the previous corresponding period
" Mr Kilmister said
.
The Campbell Chemicals division experienced varied economic conditions across its many
markets in Australasia and the Pacific.
Mr Kilmister said that tighter margins on sales and the weakening US dollar affected the
performance of the industrial chemicals business, while a focus on client service and
operational efficiency enabled the Panamex trading business to produce an improved
revenue and margin performance.
Reward Distribution realised reduced revenue as a result of tight tourism and hospitality
markets, strong competition and the continuing reassessment of target markets.
"
The business is realising the benefits of cost control initiatives of the previous twelve months
as evidenced by maintaining contribution margin on revenue despite falling sales
", Mr
Kilmister said.
The business relocated its headquarters to a new centralised warehouse and administration
centre at Yatala (South East Queensland) replacing
it's
Brisbane and Gold Coast premises.
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Mr Kilmister said the Company is continuing to invest in future growth through acquisitions.
In recent months, the Company has announced two important acquisitions in Australia and
undertaken a rights issue.
On 1 October 2009, the Company announced a one-for-six renounceable rights issue of
ordinary shares in the Company at $22.00 per share. The issue closed oversubscribed on 2
November 2009 and raised approximately $191 million net of underwriting fees and other
costs. A total of 8,939,575 new shares were allotted on 11 November 2009.
On 27 October 2009 the Company through its wholly-owned subsidiary, Australian
Laboratory Services Pty Ltd (ALS) announced a cash takeover offer for all of the ordinary
shares of PearlStreet Limited (PST) at 75 cents per share. The directors of PST have
unanimously agreed to recommend the offer in the absence of a superior proposal. A
Bidder's Statement and
a
Target's Statement w
ere dispatched to PST shareholders on 12
November 2009. As of 23 November 2009, ALS has received acceptances for more than
60%
of PST's ordinary shares, including acceptance from PST's major shareholder and
Managing Director, Mr Anthony Wooles, the directors of the PST board and a number of
large institutional shareholders.
Perth-based PST is listed on the Australian Securities Exchange and is the largest Non
Destructive Testing services provider in Australia. It provides testing, inspection, and asset
care services to the energy, resources and infrastructure sectors. The offer for PST
represents total consideration of approximately $108 million, comprising $64 million for equity
and $44 million for net debt.
On 12 November 2009 the Company through its wholly-owned subsidiary, Australian
Laboratory Services Pty Ltd announced that it had executed an agreement to acquire 100
percent of Ecowise Environmental Pty Limited (Ecowise) for a total consideration of $51
million. The consideration comprises $40 million for equity and $11 million of assumed debt.
Ecowise operates laboratories and aligned environmental services in Australia, focusing on
the water sector, across 17 east coast laboratories and offices.
"
The combination of these new businesses and existing operational capacity will place the
Group in a strong position to take advantage of opportunities as business conditions
improve
" Mr Kilmister said.
ENDS:
For further information:
Greg Kilmister, Managing Director, Campbell Brothers Limited, +61 7 3367 7900
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