Coffey shares rise on turnaround prospects
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PERTH, Feb 11 AAP
February 11 2013, 2:07PM
Shares in consultancy group Coffey International have risen more than nine per cent as the company's turnaround strategy remains on track despite a fall in first half profit.
Coffey International, a consultancy in geoscience, international development and project management, reported a 20 per cent fall in net profit to $3.7 million in the six months to December 31, 2012.
But revenue increased seven per cent to $359.8 million during the period.
At 1404 AEDT Coffey shares were 3.5 cents, or 9.6 per cent, higher at 40.0 cents.
Managing director John Douglas said he was pleased with Coffey's overall revenue performance in the face of a sharp downturn in the mining sector.
"The turnaround remains on track and we are confident the company has the firm foundations in place to deliver profitable growth," Mr Douglas said in a statement.
He said the company's performance showed a resilience to deliver reliable revenues amid growth opportunities within Coffey's existing international reach.
Based on stabilising in key markets, it expects to report solid second half revenues.
The company also said its geosciences division is addressing areas of growth outside mining.
Earnings before interest and tax fell 38 per cent to $11.3 million.
The company also said it did not declare an interim dividend because debt reduction remained a key priority.
The Coffey board will review the potential to offer a dividend before the company's full year results are released in August.
Coffey completed its refinancing earlier in February and its three key business were on track to deliver a solid performance in the second half, the company said.
Fee revenue at its geoscience division, which makes up 65 per cent of the company's revenue, increased four per cent to $138 million while international development increased 10 per cent to $59.9 million.
The company has extended its debt facility for another three years and reduced its debt limit from $149 million to $127 million.