AJ Lucas paints poor outlook
AJ Lucas Group Limited (AJL) said it was on track to report a ‘disappointing’ first half result when it reports to the market at the end of this month. The engineering firm said normalised EBITDA was set to be negative $18 million, though expected to swing to a $30 million EBITDA gain in the second half.
”The legacy of management mis-steps from the previous financial year, delays in project timing and general business uncertainty have all affected the group’s financial performance,” the company said in an update to the market.
However, on a more upbeat note, the company said the growth expected over the short to medium term would be strong, driven by tendering at Queensland Coal Seam Gas projects and development on North West Shelf LNG projects.
Looking at the previous six months, the company said the result had been adversely affected by a number of factors, including a poor result on the Minerva dispute costing $5.6 million.
”Management has also decided to take a conservative approach to various contract disputes and provided a further $4.5 million for their resolution,” the company said.
AJ Lucas said the company still expected to post a profit for the six months, however this would be on the back of a $93.5 million sale of its investment in ATP651. With the weaker underlying figures, the board said it would not be paying a dividend this half year.
The company said longer-than-expected maintenance and Christmas shutdowns had affected the result.
AJ Lucas also foreshadowed a $6 million drop in the building construction division after ‘execution difficulties’.
At the close Friday, AJ Lucas shares were down $3.24.
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