By Jenny Ruth
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Friday 13th August 2010 |
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Opus International Consultants produced better than expected revenue in the six months ended June 30 but its $10.4 million net profit was 14% below his forecast due to weaker margins in New Zealand and Australia, says First NZ Capital analyst Kar Yue Yeo.
This may be due to weaker revenue mix and delay in earnings recognition, Kar Yue says.
The appointment of David Prentice, currently head of Opus' British operations, to replace chief executive Kevin Thompson is positive as he has been part of the company's senior team over the last seven years and will provide good continuity, he says.
A new driver steering the car, the opportunities remain the same: based on the latest NZ government policy statement, road construction and maintenance spending is set to rise by 45% from $2 billion per annum in 2009 to in excess of $2.9 billion per annum (mid-point) by 2019, he says.
As NZ's largest engineering and asset management consulting group with strong expertise in the transport sector, Opus is poised to benefit from this increase.
Opus is now hiring again on a measured basis, Kar Yue says.
The government is likely to make ongoing announcements of tenders for the transport sector.
Recommendation: outperform.
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