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.
