The company posted a net profit of $165.2 million, up from $14 million, but which included the sale of a Gloucester Basin coal seam gas prospect and a 19.9% shareholding in Sydney Gas.

Despite a 17.6% improvement in group revenue to a record $499.2 million, the company’s underlying earnings before interest, tax, depreciation and amortisation were virtually steady at $44.1 million.

Despite the dissatisfaction with performance, particularly in the second half of the year, AJ Lucas was a lot more optimistic about the 2010 financial year.

Chief executive Allan Campbell said a higher annual dividend was being paid “more in expectation of much stronger results in the future rather than based on the disappointing performance of the past year”

Campbell said a partial turnaround had been seen with the drilling fleet returning to almost full deployment.

AJ Lucas worked to integrate Mitchell Drilling into its existing drilling division over the last 10 months, but these efforts were dampened by the impact of wet weather at the start of the year and the effect of the global financial crisis in the coal sector.

The company said it had witnessed confidence returning to the sector.

“Nevertheless, the legacy of the reduced economic activity in the second half of the past year is likely to persist through the first half of the current financial year, with a substantial improvement in profitability only likely to emerge next calendar year.”