Fulton Hogan lifts first-half pre-tax profit 13%, fattens order book

Tuesday 28th March 2017

Fulton Hogan, the privately-held civil construction firm, lifted first-half pre-tax earnings 13 percent as its New Zealand and Fiji operations tracked ahead of expectations, and beefed up its forward order book with some big wins in the period.

Profit before tax rose to $112 million in the six months ended Dec. 31 on revenue of $1.6 billion, the Christchurch-based company said in a statement. Managing director Nick Miller, who leaves at the end of March, said earnings were on track to deliver against the firm's annual budget with strong performances in New Zealand and Fiji.

"We are seeing our Fijian and New Zealand operations track ahead of budget, which is pleasing, with some promising developments in Australia as market activity lifts," Miller said. "Our land development business also continues to perform in line with expectation driven by strong demand in the Auckland market."

Last September, Fulton Hogan reported an 11 percent increase in net profit to $168.7 million for the year ended June 30, 2016 on a 5.9 percent increase in revenue to $3.1 billion. At the time, Miller described it as a "challenging environment" where multinational firms were competing more aggressively for large projects in New Zealand and Australia, and its forward order book was $1.9 billion at the balance date.

Since then, Fulton Hogan has had a number of "significant business wins during the six month period" with the order book at $4.6 billion, 31 percent higher than the same time a year earlier.

That includes the Central Otago Outcome Contract and Sheffield Irrigation projects, and participating in a five-year alliance to remove rail-road intersections in Melbourne and winning more national broadband network installation across the Tasman.

More recently, Fulton Hogan and engineer Aurecon have won $40.7 million of work to replace three one-way bridges in Northland, and the civil construction firm has also won a share of Wellington City Council's $30 million road maintenance contract, spanning the south and east of the capital city until June 2020.

Last month, Fulton Hogan posted a notice on its website that it misinterpreted the Holidays Act over leave calculations and payments, where it both under- and overpaid staff. The company won't be chasing overpayments, but wants former staffers with the company after 2010 and who think they may have been underpaid to get in touch.

As at June 30, 2016, Fulton Hogan's total staff entitlements to annual leave and long-service leave was $79.9 million

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