February 26, 2007
Cairns based civil construction, property and waste management company, the CEC Group Limited, has announced a net profit after tax of $10,052,067 for the half-year ended 31 December 2006 (compared to $6,138,917 for the half-year ended 31 December 2005).
CEC Group CEO, Mr Roy Lavis stated “we are extremely pleased with this result, which is in line with profit forecasts previously released. Our core business units are performing strongly and at the same time we are expanding and developing into new areas such as waste management”.
The establishment of a waste management business during the 2006 financial year represented a significant change in the CEC Group Limited's principal activities. On 31 August 2006, the CEC Group Limited (CEC) announced to the ASX that it had signed a memorandum of understanding with SITA Australia Pty Ltd (SITA) to explore the establishment of a joint venture through CEC Group and SITA which would pursue further waste management opportunities in Australia, New Zealand and certain South East Asian countries.
On 30 September 2006, CEC Group Limited sold a 50% shareholding in the controlled entity CEC Resource Recovery Pty Ltd to SembSITA Australia Pty Ltd.
Mr Lavis further explained, “one of the biggest challenges facing any construction based business in tropical Australia is inclement weather. Whilst this wet season has produced significant rainfall and caused disruptions it has not been anywhere near as impacting as the intense wet season last year, which produced cyclone Larry. Added to this is the fact that as an organisation with a 30 year history in delivering large projects in a region where extreme weather is a part of life, we get continually better at managing these challenges as a normal part of what we do".
Demand for CEC Group residential property continues to be high and reflects the underlying strength of the Cairns market. At the same time the CEC Group is acquiring land in both Cairns and Townsville to build on the already extensive land bank held by the company. Land is generally purchased in high growth corridors, typically farming land that is now, or soon will be, in the suburbs of these northern cities.
The construction component of the CEC Group is consistently strong, having grown dramatically in recent months following the commencement of a large range of infrastructure and development projects.This performance is expected to continue due to the large number of significant private and public sector projects either due to start or in the pipeline.
Mr Lavis outlined his view on the annual profit forecast “we are on track to reach our projected full year net profit after tax of $13M. That said, we do have to be slightly cautious until the wet season has ended. But assuming no significant repeats of the cyclones from last year we feel that the company is well and truly on the way to achieving this target".