Leighton swings back to black
Leighton Holdings' shareholders will have to wait until the annual meeting in a fortnight's time to get an update on the company's search for new directors to replace the three who quit after a heated disagreement.
Updating investors at the release of its first-quarter result on Monday, Peter Gregg, in his new capacity as deputy chief executive, would not comment on the appointments process.
"Really this is a board issue but the latest update that I've had is that the committee that's charged with it under [deputy chairwoman] Paula Dwyer is well-progressed," Mr Gregg said.
"There's technical issues as to why we won't appoint anyone ahead of the AGM; I'd watch this space and see what's said there."
Stephen Johns quit as chairman in March, along with independent directors Ian Macfarlane and Wayne Osborn, in protest about what they felt was interference by its German majority shareholder Hochtief, which in turn has had an extensive management clean-out since being taken over by Spanish construction giant Grupo ACS.
Monday's briefing was moved forward by a day to cater for Hochtief's quarterly result and annual meeting on Tuesday, which Leighton chief executive Hamish Tyrwhitt is attending.
Leighton posted a net profit of $123 million for the three months to March, compared with a loss of $80 million in the previous corresponding quarter, a time when the group was still working through problem contracts like Brisbane's Airport Link and the Victorian desalination plant.
The group gave a net profit guidance of between $520 million and $600 million for the year, and it had $42.2 billion worth of contracts on its order book.
The result was a "pretty solid outcome" given a "challenging macroeconomic environment, especially in contract mining", Mr Gregg said.
Analysts were slightly concerned by the group's gearing ratio, which had risen from 35 per cent to 48 per cent in the quarter, driven by the payment of its final dividend and higher project under-claims.
Mr Gregg said gearing typically blew out in the first quarter because of seasonal factors, and that he was disclosing it for the sake of completeness, given it would be disclosed in Hochtief's result the next day. "We don't think we have anything to hide. It will be back within the [preferred gearing band of 25 to 35 per cent] by year-end."
Leighton was keen to emphasise it was not focused on building up its contract book for growth's sake, and it was focused on quality projects with healthy profit margins.
"We are not targeting top-line growth; rather we are onboarding projects with good margins, as demonstrated by a closing project margin-in-hand of over 10 per cent," Mr Tyrwhitt said.