18 February 2009

Opus International Consultants, New Zealand’s largest infrastructure consultancy, has reported another good year. For the year ended 31 December 2008, Revenue was $371.5 million, up 25.4 percent on the previous year and the Net Surplus after Tax was $17.5 million, up 23.4 percent.

“The results exceed our prospectus forecasts, both in terms of revenue and profitability,” said Opus’ Chairman, Kerry McDonald. “Total Revenue was 18% ahead of forecast and Net Surplus After Tax was 10.5% ahead of forecast. Our return on equity of 24.7 percent is also significantly up on the forecast 22.8 percent.”

Earnings before Interest, Tax, Depreciation, and Amortisation (EBITDA) grew by 28.4 percent to $30.5 m and exceeded forecast EBITDA by 9.4 percent.

“This performance reflects the breadth and depth of the services that Opus provides, its expertise and experience and its commitment to its clients. Opus is a dynamic, learning organisation, which continually seeks to build on its experiences, to blend in the benefits of innovation and to anticipate the needs of its clients. It is a very pleasing result, which follows an extremely busy year, and a year that also saw a sharp economic downturn around the world.”

“2008 was a year of growth both organically and through acquisitions. During 2008 Opus acquired the Joynes Pike Group in the United Kingdom and Project Engineering Limited in Canada. Together these acquisitions contributed revenues of $18.7 million in 2008. However, due to the subsequent economic downturn, they contributed a loss after tax of $1.7 million during 2008 and we are taking steps to address that. Excluding the impact of acquisitions, Total Revenue was 12 percent ahead of the prospectus forecast and 19 percent ahead of the previous year."

“During the year we continued to strengthen our position in New Zealand, Australia and Canada. In the United Kingdom the more serious effects of the global recession and the depressed market made for difficult trading conditions, resulting in a post-tax loss of $4 million in 2008. Overall considerable new business was gained across all our market sectors and countries of operation, a significant number of existing contracts were renewed and the UK position is being actively managed.”

“It was also pleasing to note that we were ranked 123rd in terms of revenue in the 2008 Engineering News Record top 150 global infrastructure design companies, up from 134th in 2007.”

“Infrastructure asset management and development, particularly in relation to transportation, remains core to the business,” said Mr McDonald. “We have experienced significant growth in this sector and have won a number of large projects in both New Zealand and Canada. In Australia business expanded in a number of sectors, including roads and water infrastructure.”

“In meeting this increase in business, and through business acquisitions in the United Kingdom and in Canada we have grown our total staff from 2,236 to 2,563, and now operate from 81 offices world wide with some 50 areas of expertise. Opus’ ability to provide a wide range of world class services with a strong local presence is undoubtedly one of its core strengths.”

“The financial performance in 2008 reflects our strong position as an international infrastructure services provider. Whilst our financial results were ahead of forecast, the Directors consider that in the current economic environment it is prudent to maintain dividend payments in line with forecast. Accordingly we are pleased to announce a Final Dividend of 3.1 cents per share, which is fully imputed,” said Mr McDonald. “This brings the total Dividend for the year to 5.7 cents per share."

“Looking forward,” said Mr McDonald, “the outlook for global economies is unusually uncertain and is likely to be challenging. While Opus is exposed to this, we do have an advantage with our long established client relationships, strong portfolio of capabilities, our excellent people and an involvement in many market sectors. A number of these sectors are likely to benefit from increased expenditure in infrastructure and our expertise aligns well with the thinking and economic objectives of the governments in both New Zealand and Australia. 

In Canada we expect our market share to grow as our expertise is recognised by our client base of provincial and state governments and municipalities. In the United Kingdom there are some real challenges with the sharp contraction in the economy and our greater exposure to the private sector developer market. We are moving to widen our client base and are optimistic that we will come through the tough times in a strong position to move forward.”

“The immediate future will undoubtedly be challenging, but with our strong organisation and excellent capabilities and market position, Opus is very well placed to compete and succeed,” said Mr McDonald.