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RCR Tomlinson Limited results: What you need to know

construction

Results out today from engineering and construction company RCR Tomlinson Limited (ASX: RCR) suggest the company is still struggling with falling work in the sector.

RCR reported a net profit after tax of $39.1 million for the full 2015 financial year, which although down 9.7% on the previous year doesn’t appear to be a bad result, given revenues fell 13% from $1,300.5 million to $1,129.5 million.

Here’s the nitty gritty:

  • Revenues: Down 13% to $1,129.6m
  • Net profit after tax: Down 9.7% to $39.1 million
  • Earnings per share: 28.2 cents
  • Full year dividend: 11 cents (10% above last year)
  • Dividend Yield: 6.4% fully franked
  • Net Debt: $12.2 million (Down 79%. Total Debt $61m, Cash of $49.2m)
  • Operating cash flow: $32.8m

What the company didn’t make clear was that the one-off sale of property, plant and equipment delivered a net gain of $16.4 million, which should really be excluded from underlying net profit.

The good news is that the contractor now has more than $1 billion in work in hand, and has diversified into infrastructure and the energy sectors, as well as its largest earner, resources. A recent acquisition adds work in the water sector too.

Foolish takeaway

RCR Tomlinson could be one of the better stocks in the mining services/construction and engineering sector to watch. But just be aware of one-offs that could pump up profits – for that, the company gains a black mark in my books.

 

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Motley Fool contributor Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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