CEO’s Report
CEO's Report
The Downer Group has again delivered a solid result, meeting guidance with a fifth consecutive half of solid operating cash flow, a sound balance sheet and a record order book, clearly demonstrating the robustness of the Group’s business strategy.
The Group’s commitment to Zero Harm remains fundamental to the way we operate. Our LTIFR is at a historical low of 1.2, however we are reminded daily of the challenging environments in which we operate and we remain vigilant in our efforts to achieve health, safety, sustainability and environmental excellence.
We have made significant progress on our synergies program, with divisional cross-collaboration delivering a number of leveraged opportunities and group-wide procurement, property consolidation and IT/HR service rationalisation initiatives delivering significant savings. The benefits and savings generated by these strategic initiatives will be realised over the next few years as we reinvest in the systems and technology to optimise our performance and support our growth well into the future.
During the year we delivered record earnings, securing new projects and extending and renewing contracts with key clients. We further strengthened our rail infrastructure services offering with the acquisition of New Zealand-based HRS Limited and Victorian-based Sach Infrastructure Construction Ltd. We grew our asset management and maintenance capabilities with the acquisition of New Zealand business Excell Corporation. The acquisition of Corke Ltd’s Instrument Engineering business enhanced our existing instrumentation capabilities and further strengthened our depth of expertise and geographic footprint.
These acquisitions are consistent with our strategy of seeking bolt-on investment opportunities which offer value to the Group and ultimately deliver a greater service offering to our customers. Whilst our focus is on organic growth and growing our existing client relationships we are also well placed to support our clients should they seek geographic expansion in the markets we service.
Our strong joint ventures and partnerships have again performed well with KDR, our JV with international transport specialist Keolis, recently awarded the Yarra Trams franchise and the arrival of the pre-production test vehicle for the NSW Government’s new passenger trains, the Waratah fleet, (a JV with Hitachi) commencing final manufacture at our Cardiff rail facility in August this year.
Our focus on empowering our people through training and development continues to reap rewards with a number of our apprentices securing regional, state and National Apprentice of the Year awards, a great reflection on the dedication and professionalism of the individuals and their mentors. Our sound business results achieved in a time of general market uncertainty is testament to the strength and talent of the entire Downer team.
The Group’s work-in-hand of $14.6 billion, achieved in tighter markets, provides a good indication of our ability to further grow the business. New opportunities for organic growth present a sound forward outlook, however, we continue to monitor our end markets closely and manage the business prudently.
We have a world-class management team and we are making pleasing progress on our strategic journey.
Geoff Knox
CEO and Managing Director
