A COMPANY WITH TOP VALUE SOLUTIONS; PUTS IRAQ ON HOLD Sydney - Thursday - June 17: (RWE) **********************************
OVERVIEW: *********
Dot.com companies are starting to show there is money in the business if you pick the right sectors of the IT industry.
Take Coffey International Ltd for example.
It provides both physical and social infrastructure solutions to business, government and development assistance agencies.
The Company operates two divisions:
* the Consulting Business, which comprises Coffey Geosciences, Control Testing Laboratories, Water Studies, Soil & Rock Engineering and IT Environmental
* and the International Development Business, which comprises SAGRIC International, Coffey MPW and Landmarc.
Following the acquisition of IT Environmental in March 2004, the company now employs around 750 people and is one of Australia’s largest service providers to the Asia Pacific Region.
The only cloud on the horizon seems to be the fate of a couple contracts in Iraq.
Other Australian companies have been reticent to disclose their activities in this war torn and unhappy country.
Coffey International says the board wants to reassure the market that the present negative climate in Iraq will not affect the company's strong results.
The company has received several enquiries from investors and analysts about the perceived effect of Iraq on the Coffey share price over the past two months.
"We are concerned that assumptions are being made that our contracts in Iraq will adversely impact our results, and we wish to clarify the situation.
"We have two aid-funded contracts in Iraq, both of which have been delayed by increased security concerns due to the increased terrorist actions in recent weeks.
"Neither of these contracts require any investment by the Company and hence the only risk to Coffey is delays in the revenue and profit from these contracts," continued Mr Olds.
"Due to strong performance of the Coffey businesses in the second half of 2003-04, we have been able to exceed our expectations without reliance on the contributions from the Iraq contracts.
"Neither of these contracts have been factored into our financial forecasts for this year or next year.
SHARE PRICE MOVEMENTS *********************
Coffey shares yesterday sold 14c higher at $5.35.
Rolling high for the year has been $5.75 and low $3.55. Dividend is 28c to yield 5.23 per cent.
This week Coffey International directors issued a profit upgrade based on its excellent second half results in all operating companies.
Directors told the ASX it expects the company's full year results to exceed previous forecasts.
"We now expect profit after tax to be 15 per cent to 20 per cent greater this financial year rather than the 5 to 10 per cent growth previously forecast.
"We are also well advanced in our planning for 2005.
"Coffey International had previously forecast 50 per cent profit growth over the three years from 2003 to 2006.
"but we now expect to achieve that growth by the end of 2005," said managing director Roger Olds.
"We will provide further updates on this as the plans for next year are finalised and approved.
"This improved outlook comes from strong performance in all aspects of our core businesses and acquired businesses.
"We intend to continue the strategy of organic growth and acquisition of specialist businesses.
Mr Olds said the company was well advanced on another business which we expect to complete around 30 June, he continued.
He pointed out that when they are implemented all profit will be surplus to our forecast," he said.
During the 2002/03 financial year, Coffey generated $38 million revenue in Australia, $38 million in South East Asia, $21 million in the Pacific and $13 million in China, Sri Lanka, India and the Middle East.
BACKGROUND **********
Coffey International Limited was listed on the Australian Stock Exchange in January 1990.
It has grown dramatically in more than a decade from its roots as a specialist scientific and engineering consulting partnership into a diverse listed group of consulting and project management businesses, now turning over about $140 million per annum.
It has built an enviable reputation for service, quality and innovation in both the Commercial and International Development sectors.
The group is committed to providing high quality, specialist consulting and project management services to its clients anywhere in the world.
It is structured in the following business streams:
The consulting group, operates through 27 offices in Australia and South East Asia.
It is renowned for its expertise in geotechnical engineering, environment, hydrogeology, hydrology, natural resources, geophysics, mining and civil engineering.
It comprises Coffey Geosciences , Water Studies (acquired in 1999), Control Testing Laboratories and Soil & Rock Engineering Business (acquired in 2003), and IT Environmental (acquired in 2004).
The International Development Business comprises SAGRIC International, Coffey MPW, Landmarc Limited, and WD Scott International Development Consultants, and operates from its Adelaide headquarters, supported by various regional offices in Australasia.
It offers project management and administration expertise in the areas of Water Supply and Sanitation, Education & Training, Governance, Health, Community Development, Gender, Land Services, Tourism, Procurement, Agriculture and Environment.
Coffey International acquired SAGRIC International in 2000.
Its customers are benefiting significantly from the synergies between SAGRIC and the original Coffey businesses.
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