Property editor of the NZ Herald

Fulton Hogan posts record revenue

The company has made a big turnaround in net profit after tax from $7.9 million last year to $96.5 million.
The company has made a big turnaround in net profit after tax from $7.9 million last year to $96.5 million.

One of Australasia's biggest infrastructure, resources and roading businesses wants to eliminate fatalities in the year ahead after six workers were killed in the space of two years.

Suzanne Caudell, a subcontractor, died in central Queensland in January after a member of the public breached temporary traffic control measures and a security guard, Charanpreet Dhaliwal Singh, 22, was found slumped over a concrete block at a Fulton Hogan construction site in West Auckland in the early hours in November 2011. A murder charge was laid.

Nick Miller, the West Otago-born, Christchurch-based Fulton Hogan managing director, said the company had substantially increased safety measures.

"We take health and safety very seriously," he said, citing a 41 per cent improvement in total recordable injury frequency rates.

"We do work in a hazardous area which requires the public to show respect for traffic control put in place," he said, referring to Suzanne Caudell's death.

"Philosophically, any injury on our site is unacceptable, but our target is zero total injury frequency rate."

The four people killed in the financial year to June 2012 were Kerry Ferris, at Nelson after the 12-tonne roller he was driving rolled down a bank into a river bed, Richard McGavin, who was crushed between two trucks during a water-cutting operation at Ringarooma, Australia, Walter Crosa and Jeff Kunst.

Fulton Hogan yesterday announced record revenue, up from last year's $2.73 billion to $3.22 billion and a big turnaround in net profit after tax from $7.9 million to $96.5 million.

But last year's profit was depressed and the Australian construction business posted losses because of management challenges, prolonged wet weather, growing pains from an earlier acquisition, underperforming projects and costs of changes to address performance issues.

Key projects won in the June 2013 year include Canberra's A$245 million ($279 million) Majura Parkway, the Tekapo canal relining for Genesis in the McKenzie Country and the A$250 million Melbourne water maintenance and low-risk capital services programme.

Miller said the profit rise came from several areas.

"This included our Australian construction and industries businesses as well as New Zealand infrastructure and regional businesses, with strong results from the metropolitan markets of Auckland and Christchurch," he said. "We also experienced a high level of demand for our expertise in airport surfacing including Auckland, Dunedin, Melbourne, Brisbane, Darwin, Coffs Harbour and several defence installations."

Fulton Hogan is now bidding for Wellington's Transmission Gully, a western Sydney maintenance contract, New South Wales' Princes Highway upgrade and southeast Queensland road maintenance contracts.

Shell's shareholding is gradually reducing, down from the original 37.4 per cent in December 2010.

In the 2013 financial year, Fulton Hogan paid Shell $55.7 million for 5 per cent, reducing Shell's 15.4 per cent to 10.4 per cent. The buyback of all Shell's holding will be completed by December next year.

That deal was based on 2009 valuations and the buyback is understood to have been in Fulton Hogan's favour because profitability has risen substantially since then but Miller said it had been a good deal for both parties.

He said most of the company's work still came from the state sector.

The Fulton and Hogan families remain the largest shareholders in the company, which employs 5300 people.

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