Daily ShareChat: Opus International Consultants

Opus International Consultants is well-placed to resume strong growth following the stemming of its British and Australian losses and a brighter outlook for infrastructure spending in its markets, says Selwyn Blinkhorne, an analyst at Craigs Investment Partners.

Opus reported a 6.3% rise in net profit to $18.6 million for calendar 2009 despite revenue falling 1% to $367.8 million.

Blinkhorne says the $13.5 million second-half net profit compares with the $5.1 million earned in the first half and reflects Britain moving from a $6.7 million loss to breakeven and Australia moving from a small loss to a $2.3 million profit "resulting from staff reductions, shorter working hours and rigorous cost controls."

Opus had significant exposure to private sector developers in both countries.

"Opus did not issue 2010 earnings guidance but general comments appear cautiously optimistic," Blinkhorne says.

"With increased government infrastructure spend likely in Opus' markets, combined with the mostly sustainable earnings performance in the second half, we have increased our 2010 and 2011 earnings forecasts by about 30%. Our dividend forecasts have also been increased accordingly."

Blinkhorne now expects a $23.5 million net profit for 2010 and $24.5 million for 2011 with dividends per share rising from 6.7 cents in 2009 to 8.5 cents in 2010 and 10.5 cents in 2011.

BROKER CALL:  Craigs Investment Partners rate  Opus International Consultant as buy.

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