brandrill announces 8.0 million profit

Brandrill Limited
ASX Announcement 29 August 2006
27 Quill Way
Henderson Western Australia 6166
Telephone: +61 (08) 9494 6500
Facsimile: +61 (08) 9494 6501
E-mail: [email protected]
Website: www.brandrill.com
Stock Exchange Announcement 29 August 2006
BRANDRILL ANNOUNCES $8.0 MILLION PROFIT
Drill and blast specialist, Brandrill Limited, announced today their $8.0 million net profit result for
2005-06 and released their audited annual accounts.
The $8.0 million net profit result is after a positive tax adjustment of $1.9 million. Pre-tax profit for
FY2006 is $6.2 million, some 280% above the comparable FY2005 trading result of $1.6 million.
Sales revenues for FY2006 were $103 million, an increase of 43% over last year’s $71 million.
Revenue growth has been through increasing the number of rigs employed, expanding the
contractual base of the company and increasing numbers of staff. Profit margins and revenues grew
significantly from the first to the second half of the year driven by a number of factors:
�� Ongoing incremental improvements in operational productivity, efficiency and improved
purchasing terms following the completion of our restructuring;
�� Increases in rig reliability and mechanical availability stemming from upgraded
maintenance performance;
�� The commencement of the major overhaul and maintenance workshop at Henderson
allowing rigs to be returned more quickly and cost effectively to work;
�� Some increases in rates reflecting a tightening of demand for our services; and
�� The benefit through economies of scale from growth in revenues against our largely fixed
overhead structure.
The balance sheet has positioned the company for further growth. As at 30 June 2006, the net debt
to equity ratio was 32%, working capital stands at $10 million and the interest cover ratio is five
times.
Managing Director, Ken Perry, commented “This is a very pleasing result. With $100 million work
already locked in for this year, and four big rigs to be delivered in the next six months, the
foundation has been laid for further strong growth in 2007 in both revenue and profit. The industry
outlook for both iron ore and coal is very healthy for the foreseeable future”.
The strategy remains to focus on growing the drill and blast business in Australia. The major
objectives are to obtain more trained staff, acquire additional cost effective drill rigs and secure
long production related contracts with reputable clients.
For further information: Mr Philip Werrett, Company Secretary