Total revenue was $11.9 billion, a 3% increase compared to the same time last year.
Comparable earnings before interest, tax, depreciation and amortisation were reported at $945 million, up from $929 million at the same time last year. Net profit after tax was $319 million, up from $255 million as of June 30 last year.
Growth was mainly due to an increase in construction work, with total sector activity spiking 5% to $7.7 billion.
A focus on capital management and mining fleet redeployment resulted in a reduction in capital expenditure of 22%.
Comparable gearing was 36.5% at June 30, 2014, an improvement from 44.7% at June 30, 2013.
For the 2014 financial year ending December 31, 2014, Leighton reiterated previously issued guidance for underlying NPAT at $540-620 million and gearing of 20-35%, subject to market conditions, unforeseen circumstances and the outcomes of the strategic review.
The Leighton board determined to pay out 60% of underlying NPAT for HY14 and approved a 57c per share, 25% franked interim dividend to be paid on October 3 this year.
It is an increase of 27% compared to the 45c per share, 50% franked interim dividend in HY13.
Leighton Holdings executive chairman and CEO Marcelino Fernandez Verdes said the group’s positive performance received an extra boost from the strategic review of its management and activities since majority shareholder Hochtief took over 62.6% of the group in March.
“I’m pleased to report the Leighton group net margin again expanded during the period, continuing a steady improvement from 1% in HY12 to 2.7% in HY14,” Verdes said.
“We expect to further increase net margin as we simplify the structure of the group.
“Reducing working capital remains a focus.
“We are improving the approach to working capital management on new projects and seeking to strengthen the balance sheet through the options we are considering as part of the strategic review.”
The strategic review began in March and triggered a change of leadership, with Verdes taking over as executive chairman and CEO of Leighton Holdings, replacing former chairman Bob Humphris who resigned in June and former CEO Hamish Tyrwhitt who left the company in April.
The review also saw the group streamlining its operations and looking at potential divestment or investment options for subsidiary John Holland and Leighton’s services and property divisions.
“The services, property and John Holland businesses will be subject to the outcome of the strategic review and a final decision is yet to be made,” Verdes said last month.
“As part of this process we have engaged external advisors and will be having discussions with potential investors.”
Other subsidiaries and activities of the group were restructured into strategic arms focused on the areas of construction, mining, public private partnerships and engineering, with each sector now led by Leighton executives appointed to the role of managing directors.
Leighton Contractors general manager David Jurd is leading Leighton construction, Thiess managing director Bruce Munro is leading Leighton mining, Leighton Holdings chief development officer Angel Muriel is heading Leighton PPP and Leighton Contractors managing director Craig Laslett is heading Leighton engineering.
“We have made progress on our strategic review including the appointment of managing directors and the identification of executive teams, transition planning for the new organisational structures as well as for operational and legal matters and the continued focus on the collection of receivables,” Verdes said.
Looking forward, the group unveiled a strong pipeline of work, with $7.8 billion worth of new contracts, extensions and variations and securing a preferred bidder position on $5 billion worth of contracts, compared to $3 billion in June last year.
“Some $125 billion in new infrastructure project spending is expected by the end of the decade in Australia, including federal government commitments and the private and state investment that is expected to follow,” Verdes commented.
“Similarly, in our markets in Asia and the Middle East, governments continue spending on infrastructure.
“This expenditure will be underpinned by the emergence of new, more attractive PPP models, in which we will seek to take on roles as an equity participant, contractor and asset manager.
“We are already seeing the positive impact of the federal government’s infrastructure initiatives, with our 12-month tender pipeline approximately 33% higher than the equivalent pipeline at the time of the FY13 result and, looking further ahead, we have under preparation the largest pipeline of $1 billion-plus tenders in Leighton’s history.”
