E & A moves on from 2012 setback
Adelaide-based engineering and mining services group E & A Limited is preparing to announce a capital raising, with the company’s shares in pre-open following the Australian Stock Exchange granting a trading halt.
E & A Limited has provided earnings guidance for the first half of the 2014 financial year net profit to exceed last year’s $4.1 million.
The company maintains a dividend pay-out ratio of 60 per cent to 70 per cent.
The halt will remain in place until the opening of trade on Friday 25th October , or earlier if an announcement is made to the market.
E&A Limited operates eight wholly owned subsidiaries across the mining, resources, defence, water, energy and financial services industries.
The company was one of many that geared up in 2011 for the much-anticipated $30 billion expansion of Olympic Dam.
It was among the hardest hit when BHP Billiton confirmed in August 2012 that the expansion project had not been approved and any future expansion would be staged and dependent on technological advances to improve its economic viability.
At the time, E & A’s share price plummeted to around 15 cents; today its at a high of 73 cents.
After the Olympic Dam setback E & A turned its attention a range of other prospects, including oil and gas in the Cooper Basin.
In its most recent annual report, released last month, the company recorded net profit after tax of $7.7 million, an increase of 168 per cent on the prior year.
Revenue was up 22 per cent to $200 million and the company paid a fully franked final dividend of 2.5 cents, taking the full year dividend to 5.0 cents fully franked, an increase of 25 per cent on last year.
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E & A has spread its wings with interests in heavy mechanical and electrical engineering, maintenance engineering and plant construction, and water and fluid solutions.
It also has an investment and corporate advisory business.
Executive chairman Stephen Young, said the 2013 full year result reflected the initiatives taken to grow the business and were achieved despite some costs associated with those initiatives.
The imminent capital raising suggests E & A is getting ready for the next stage in its development.
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