AJ Lucas boss apologises for poor result

AJ Lucas posted a net loss of $7.13 million - down from a $103.3 million profit last year - for the year ended June 30, on the back of a 28.2 per cent fall in revenue to $358.5 million.

Its managing director, Allan Campbell, apologised for the poor result on numerous occasions in an investor presentation yesterday. The company had suffered under a "challenging business environment" with a high level of business uncertainty causing extensive project delays, he said.

Revenue in its BC&I division almost halved to $155 million as poor project execution and provisions incurred on old projects exacerbated project losses and deferrals. Mr Campbell said there would be wholesale management changes, after the division posted a loss of $19.5 million.

"Of the top eight or nine people in that division, six executives have either left or will be leaving."

Before-tax earnings in AJ Lucas's drilling division fell 32 per cent, from $34.5 million to $23.7 million due to under-utilisation in its drilling fleet and poor cost controls.

Despite the result, Mr Campbell said he was confident the company had seen the worst, and he provided an improved outlook for this financial year, as a revival in the coal seam gas sector gathered pace and "a return to significant activity in the mining sector".

The Sydney company posted negative cash flow of $89.4 million after heavy investing and financing cash outflows, ending the financial year with $6.9 million in hand.

By far its largest contributor to net cash inflow was the $98.5 million sale of its 15 per cent stake in a Surat Basin coal seam gas tenement, to the Japanese company Toyota Tsusho in December.

Shares in AJ Lucas fell 7.5?, or 3.7 per cent, to $1.955.

The company did not declare a final dividend.