Water Week

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Crane Group moves away from residential plumbing sector towards services to large-scale water infrastructure projects: 35pc fall in net profit

Posted by waterweek on 2 October 2007

Crane Group was expecting its move away from the residential plumbing sector towards services to large-scale water infrastructure projects would help it deliver a profit improvement this financial year despite persistent headwinds in some markets, reported The Australian Financial Review (14/8/2007, p. 18).

Water infrastructure market highlight for Crane: “The highlight for the year was probably our success in the water infrastructure market,” Crane chief executive Greg Sedgwick said, pointing to participation in projects such as the $501 million Wimmera Mallee water pipeline in Victoria. “We’re expecting further water infrastructure projects to be awarded and hopefully to win our fair share.” Crane reported a 35 per cent fall in net profit for the year ended June 30 to $47.8 million yesterday, given a $6.2 million loss on significant items compared with the previous year’s $26.8 million gain from the sale of underperforming businesses.

Profit increased 14.5 per cent before one-off losses: Net profit before significant items increased 14.5 per cent to $54 million while earnings before interest and tax rose 3.3 per cent, mainly on improvements in the Iplex water pipelines business. Sedgwick said Crane’s priority over coming months was to ensure the successful integration of West Australian plastic pipelines manufacturer Kingston Bridge Engineering, which it agreed to buy for $100 million last month.

Tradelink still delivered an improvement in earnings: The Australian Competition and Consumer Commission cleared the deal on Friday 10 August and Crane expects to complete it by 31 August. The company’s plumbing supplies business, Tradelink, is exposed to the patchy residential construction market in NSW and New Zealand but still delivered an improvement in earnings.

The Australian Financial Review, 14/8/2007, p. 18

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