Chairman’s Report
Chairman’s Report
I am pleased to report a solid result for Downer Group shareholders for the year ended 30 June 2009, with the company achieving net profit after tax of $189.4 million. Total revenue was $5.9 billion, an increase of 6.3 per cent on the previous year, and earnings before interest and tax was $304.8 million, an increase of 8.4 per cent on last year. This was the fourth consecutive set of results in line with market guidance. This is particularly pleasing at a time of general market uncertainty.
Operating cash flow for the period was $336.5 million, an increase of 21.9 per cent, a significant achievement during one of the toughest financial climates on record and an acknowledgement of the successful financial and operational initiatives that were implemented as part of the Group’s strategic plan. I am also delighted to report the Group further enhanced its financial position, maintaining a sound balance sheet with gearing (net debt to equity) of 38.9 per cent.
The directors declared an unfranked final dividend of 16 cents per share (2008: 12.5 cents), payable on 2 October, 2009 to shareholders on the register at 1 September, 2009.
The management team, under the leadership of CEO and Managing Director Geoff Knox, worked diligently to identify and realise significant organisational synergies. The strong contract retention and renewal rate, and work-in-hand growth, further demonstrated the robustness of the Group’s strategic efforts.
We continued to grow the business both organically and through a number of bolt-on acquisitions, resisting perceived bargains that would not have genuinely furthered our longterm objectives. We are now well-positioned to consider more significant expansion opportunities as they are identified throughout the coming year.
The Board has been pleased with the improved alignment between the interests of our investors, our people and the communities of which it is our pleasure to serve. The focus on Zero Harm – incorporating safety, the environment and sustainable development – as well as creating shareholder value, is reflected in the ongoing improvement in safety performance to a record low in our lost time injury frequency rate.
The Zero Harm focus has also been carried into the business risk area with the Board instituting a Risk Committee chaired by Mike Harding. The way that risks and opportunities are managed will be a major determinant for the Group’s future success. This committee, in conjunction with the Board, aims to ensure that the risk management procedures in place are adequate for what are likely to be ongoing challenging times.
Peter Coates AO has confirmed his intention to retire at the 2009 AGM due to the time commitments of his other business interests and directorships. I would like to acknowledge the valuable contribution of Peter and indeed that of our fellow directors in consistently providing strong leadership and advice to support the objectives of the Group.
Our results reflect a tremendous effort by our employees during a challenging period and I have been delighted by the commitment and enthusiasm of our people as well as the market’s response to the Group’s strong performance. The Board thanks you for your ongoing support and looks forward to a successful 2010.
Peter Jollie AM
Chairman
