UGL (UGL) will proceed with a demerger of its engineering and property businesses as soon as possible, after posting a steep fall in full-year profit.
In the year to June 30, underlying net profit after tax was $92.1 million, at the lower end of the company's revised guidance in May for between $90 and $100 million. In May the engineering company had slashed its full-year earnings guidance from $150-$160 million.
Investors responded positively to the news. At the 1015 AEST official market open UGL shares were 3.11% higher at $7.63, against a benchmark index fall of 0.07%.
Analysts were anticipating underlying NPAT of $91 million, according to Bloomberg data.
UGL's net profit was $36.472 million, a 72.8% decline on the previous year's $135.392 million.
The group said net profit was weighed down by $55.6 million of costs associated to restructuring, the rebranding of DTZ, the amortisation of acquired intangibles, and a gain on the sale of property.
Revenue in the same period was $3.816 million, 14.3% lower than the 4.454 billion in 2012.
The group announced a fully-franked final dividend of 5 cents, to be paid on September 6 to shareholders on the register at August 23. Combined with the interim dividend of 34 cents, the group will pay a fully-franked total dividend of 39 cents in the year.
In 2012, UGL paid a partially-franked total dividend of 70 cents.
Demerger next logical step: Rowe
UGL chairman Trevor Rowe said the planned demerger would enhance shareholder value over the short and long term.
"Over the past decade, UGL has successfully grown its property services and engineering businesses to become sizeable businesses which are leaders in their respective markets," he said.
"As both businesses enter their next phase of growth, the operational and strategic priorities of each business, and the associated management and financial requirements are starting to diverge.
"As a result, we believe a demerger is the next logical step which will allow each business to pursue their own strategic priorities and opportunities for growth."