McConnell Group doubles profit

Press, 6 February 1986, Page 10

McConnell Group doubles profit

PA Wellington McConnell Dowell Corporation’s listed Australian subsidiary, McConnell Dowell Group, Ltd, has more than doubled its interim profit in the six months ended December 31. McConnell Dowell Group (formerly Acrow Australia, Ltd) announced an unaudited tax-paid profit before extraordinary items of sAust72B,ooo (last year sAust322,ooo), an increase of 126 per cent. Group revenue for the half-year was sAustl6.o94M (sAustl3.s67M). The consolidated operating profit before tax and extraordinary items was SAustl .484 M compared with sAusts93,ooo for the corresponding period last year. Preference dividends paid were SAustls9,ooo (SAustl 96,000). Therefore the net operating profit before extraordinary items attributable to ordinary shareholders was sAusts69,ooo (sAustl26,ooo). Directors said they were confident that results for the second half should exceed the first, given a continuation of current trading conditions. Having regard to the recent capital restructure, directors resolved not to declare an interim dividend, but indicated the

company’s intention to pay the final dividend for the year ending June 1986. The directors said the one-for-one rights issue had been fully subscribed and that shares not taken up by McConnell Dowell Corporation had been placed with institutions and private investors through an underwriting agreement with PNC International Financial Services, Ltd, in conjunction with ABS White and Company, who acted as brokers to the issue. This action reduced the McConnell Dowell Corporation shareholding to 55 per cent. “The sAustll.6M raised from the issue will be used to improve further debt gearing and assist in future operational and geographical expansion,” said the chairman of McConnell Dowell Group, Mr Sam Priestly. “In addition to the rights issue, new. credit facilities have also been established. An unsecured loan facility of sAust32.sM has been finalised with a syndicate of Australasian banks and merchant banks. This facility, supported by a negative pledge, will simplify the method by which McConnell Dowell Group debt is structured and will allow greater flexibility in any future debt raising.”

PNC International Finance Services, the

company’s financial advisers, organised the facility. “This facility, together with the funds obtained from the share placement, will ensure that McConnell Dowell Group, Ltd, is well placed to take advantage of opportunities as and when they occur,” said Mr Priestly. He said the company had just completed the purchase of Bondor Manufacturing Proprietary, Ltd, a Bris-bane-based operation. This organisation is involved irt the manufacture of instated sandwich panel'?’ the manufacture, installation and maintenance of coolrooms and the manufacture and sale of portable buildings. The activities of Bondor are complementary to those of a McConnell Dowell Group subsidiary, Acrow Proprietary. It will be operated as an independent profit centre, but it is the company’s intention to expand Bonder’s portable building business both in size and geographically taking advantage of the Acrow national marketing network. Bondor Manufacturing recently won a sAust3M contract to provide and install insulated panels for the Expo centre under construction in Brisbane. Mr Priestly said the company was completing another acquisition which would be announced soon.