Engenco doubles first half profits

Convair and Drivetrain revenues higher in a buoyant business climate

Engenco doubles first half profits
A strong construction industry is helping to boost Convair Engineering's order book, Engenco says


Specialist industrial engineering services company Engenco has more than doubled its net profit after tax in the six months to December 31, recording a result of $7.5 million during the period.

The profits, well above the $2.9 million profit attributable to members recorded in the previous corresponding period (pcp), came on the back of a 25 per cent rise in revenues to $78.2 million for the half.

Engenco managing director Kevin Pallas says the company had enjoyed "positive contributions from a broad range of factors in the six months, including quality of projects and revenue."

In particular, the company’s Drivetrain power and propulsion business has performed well as on the back of improvements in the Australian mining sector.

The division’s revenue in the half had risen to $28.2 million, up from $18 million in the pcp, after the launch of initiatives aimed at increasing its specialist product and services portfolio, including in the commercial vehicle and gas compression industries.

Defence sector project activity and product support volumes also led to encouraging prospects for Drivetrain, Pallas says.

"Workshop utilisation levels have improved and we have met the additional demand by up-scaling our facilities and growing our workforce," he says.

Dry bulk road tanker design and manufacturing business Convair Engineering also returned improved revenue, at $7.6 million compared with $7 million at the same time in 2016, following further advances in tanker design and production methods.

"The Australian construction industry is experiencing a robust period, and this has helped boost demand for new tankers significantly, leading to a healthy order book for Convair," Engenco says.

Looking to the future, Pallas says he expects group performance will moderate in the second half, saying much of the strength of the first half was a result of foundations laid in prior periods.

"We are working hard to take advantage of the current buoyant business climate and, whilst remaining cautiously optimistic about the future, we will continue to invest in value-adding growth initiatives," he says.


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