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ADELAIDE BRIGHTON INVESTOR NEWSLETTER - …

Level 1 Telephone (08) 8223 8000. 157 Grenfell Street International +618 8223 8000. ADELAIDE SA 5000 Facsimile (08) 8215 0030. GPO Box 2155 ADELAIDE SA 5001. ABN 15 007 596 018. 16 October 2017. The Manager Market Announcements Australian Securities Exchange Limited 20 Bridge Street SYDNEY NSW 2000. ADELAIDE BRIGHTON INVESTOR NEWSLETTER - CORRECTION. ADELAIDE BRIGHTON refers to the market release of the Company's INVESTOR NEWSLETTER made earlier today. The original INVESTOR NEWSLETTER released contained a typographical error. The revenue for the half year to June 2017 was correctly stated in the body of the NEWSLETTER as $ million. However, in the summary points on the right hand side of page one, the revenue was stated as $ million. This is incorrect and should be $ million. Attached is a copy of the corrected NEWSLETTER . FOR FURTHER INFORMATION: MS LUBA ALEXANDER.

Adelaide Brighton Investor News October 2017 1 Investor News Interim Dividend 8.5cps Fully franked, paid on 5 October 2017 The Company’s growth strategy has three principal

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Transcription of ADELAIDE BRIGHTON INVESTOR NEWSLETTER - …

1 Level 1 Telephone (08) 8223 8000. 157 Grenfell Street International +618 8223 8000. ADELAIDE SA 5000 Facsimile (08) 8215 0030. GPO Box 2155 ADELAIDE SA 5001. ABN 15 007 596 018. 16 October 2017. The Manager Market Announcements Australian Securities Exchange Limited 20 Bridge Street SYDNEY NSW 2000. ADELAIDE BRIGHTON INVESTOR NEWSLETTER - CORRECTION. ADELAIDE BRIGHTON refers to the market release of the Company's INVESTOR NEWSLETTER made earlier today. The original INVESTOR NEWSLETTER released contained a typographical error. The revenue for the half year to June 2017 was correctly stated in the body of the NEWSLETTER as $ million. However, in the summary points on the right hand side of page one, the revenue was stated as $ million. This is incorrect and should be $ million. Attached is a copy of the corrected NEWSLETTER . FOR FURTHER INFORMATION: MS LUBA ALEXANDER.

2 GROUP CORPORATE AFFAIRS ADVISER. TELEPHONE 02 8248 9911 OR 0418 535 636. Visit our website INVESTOR News ADELAIDE BRIGHTON INVESTOR News October 2017. From the CEO and Managing Director The Company's growth strategy has three principal I am pleased to report that, while elements: ADELAIDE BRIGHTON faced a number of Continuing Group-wide operational challenges in the first half cost reduction and of 2017, the Company achieved record operational improvement revenues and maintained the ordinary Growth in our lime dividend at cents per share (fully business to supply the franked). Our balance sheet remained resources sector strong and we continued to make Focussed, relevant and strategic investments to underpin our value-adding vertical future growth. integration Our interim results reflect the resilience of the In the past five years we have invested Financial results Group's diversified business model and the $300 million in productive acquisitions, for the half year ended success of our long term business strategy.

3 Including $ million invested in bolt-on 30 June 2017. Group revenue of $ million for the half year acquisitions in 2017. Since the beginning of Half year Group revenue of was higher than in the prior corresponding the year we have acquired three downstream $ , up period, underlining the continuing strength of the premixed concrete and upstream aggregate Statutory net profit after tax Victorian, NSW and Queensland construction businesses that have added strategic was $ million for the half and infrastructure sectors and an improvement positions and scale to the Company's existing Underlying net profit after tax, in the South Australian (SA) market. operations, on attractive financial metrics. which excludes restructuring and transaction costs, was However, lower cement demand in Western The immediate and longer term benefits $ million, down Australia (WA) and the Northern Territory (NT), of the acquisitions are reviewed in detail on Underlying earnings due to weak residential and non-residential pages 2 and 3 of this NEWSLETTER .

4 Before interest and tax activity, partly offset growth in demand in other was $ million States. Demand for lime in WA and in the NT Outlook remained stable. Interim Dividend The Company expects sales volumes of Earnings and margins were higher in the cement and clinker to be higher than in 2016. concrete and aggregates business, underpinned and sales volumes of premixed concrete by strong volume growth and rising prices. and aggregates are projected to increase Fully franked, this year due to infrastructure projects on the paid on 5 October 2017. We have a geographically balanced business that is now more resilient to cyclical swings east coast and in SA. The recent business in demand in any one market and our greater acquisitions will add further sales in Victoria, vertical integration has enhanced value through SA and the NT.

5 Cost synergies, logistics benefits and raw We had a strong finish to the first half and are materials pull through. looking forward to improved earnings in the ADELAIDE BRIGHTON 's long term growth strategy second half, with strong demand anticipated has remained consistent over several years on the east coast as well as favourable pricing and, because it accommodates fluctuations and further efficiency benefits. in demand by sector and by geography, the ADELAIDE Group is well-positioned to absorb variations Martin Brydon BRIGHTON 's 2017. in State-by-State performance while continuing Acquisitions to meet shareholders' expectations. p2/3. ADELAIDE BRIGHTON INVESTOR News October 2017 1. ADELAIDE BRIGHTON 's 2017 Acquisitions: A continuing strategy of vertical integration On our website, we describe ADELAIDE BRIGHTON as a leading Australian integrated construction materials and lime producing group of companies.

6 There's a key word in that sentence integrated and it goes to the heart of our growth strategy. To date in calendar year 2017, ADELAIDE improved concrete position in Victoria and, BRIGHTON has acquired three businesses importantly, our first foray into aggregates at a total cost of $ million: in Melbourne; Davalan complements our Central Pre-Mix Concrete in Victoria, existing concrete operations in South Davalan Concrete in South Australia and Australia which are highly complementary Holcim's concrete and aggregates operations to existing South Australia hard rock in the Northern Territory. and sand operations, while Holcim NT, a strong, integrated business with four As Executive General Manager of the concrete plants and two quarries provided Concrete and Aggregates Division, George a downstream customer for our cement Agriogiannis puts it: each of those position in the Territory.

7 Businesses is a strategic fit with our existing Mr Agriogiannis says that at ADELAIDE operations. Central Pre-Mix offers us an BRIGHTON , an acquisition that fits' may offer various benefits: additional scope to supply a market; opening up a new market; creating a new customer or supplier or reinforcing our presence or competitiveness in a particular market. For example, the Holcim NT business . rebranded Hy-Tec gives ADELAIDE BRIGHTON access to a number of tenements where, in the future, we can open up new quarries. It also shores up a cement customer in the Territory and is the first footprint by Concrete and Aggregates there. Central Pre-Mix gives us an important quarry asset, while Davalan directly complements the acquisition of Direct Mix in South Australia in 2014. As a result, ADELAIDE BRIGHTON is now number one in Concrete and Aggregates in South Australia.

8 Very often, the integration process is a two-way street . both companies benefit.. George Agriogiannis Central Campbellfield site ADELAIDE BRIGHTON INVESTOR News October 2017 2. ADELAIDE BRIGHTON Operations Concrete and Aggregates We pay particular attention to introducing new staff to the ADELAIDE BRIGHTON Group. Once they join us, we want them to stay with us and we work hard to ensure this happens, . said Mr Agriogiannis. One area of particular focus is on occupational health and safety (OH&S). It is, at times, ADELAIDE BRIGHTON 's biggest challenge. Company cultures differ and there are privately- owned companies that may see OH&S costs as overheads to the contrary, we see them as an investment both in the business and in our All of our acquisitions have an eye, staff. Our insistence on this critically important not just on today, but on what we might area is non-negotiable.

9 Need to do at some point in the future. So, how important is it for this conglomeration It should be noted that, along with the of businesses many of them with quite business opportunity that each acquisition different cultures to become a part of a single presents, there are also significant challenges. ADELAIDE BRIGHTON Group? For instance, it's critical that the acquired It is vitally important, says Mr Agriogiannis, but businesses are value-adding and to do that there is merit in allowing some differences in requires more than simply understanding approach for those businesses that operate how the new operations fit' with what we under a different brand, especially in the front- have already. end transactional space. Integrating a new business and settling in a In Melbourne for example, Hy-Tec and Central new group of employees is as much an art as Pre-Mix are clearly members of the ADELAIDE a science, according to Mr Agriogiannis, and BRIGHTON Group, but if they go about aspects it doesn't happen by chance.

10 We appoint an of their business somewhat differently from integration team, headed by a project manager, one another, we see that as a positive in it is their task to look at every aspect of the market awareness.. newly-acquired business and how things are Mr Agriogiannis, a civil engineer by profession done there. Then, in an intensive period, we who has been with ADELAIDE BRIGHTON for six drive a consistency of approach. years but has over 20 years' experience in Nevertheless, we also learn much from concrete and aggregates, sees the acquisitions the businesses we acquire. They are well as a means of reinforcing and diversifying the run, innovative and dynamic and they can company's operations in Australia. often demonstrate proficiency that we then adopt. Very often, the integration process is a two-way street both companies benefit.


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