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AdBri's FY profit hit by underpayments

Stuart Condie  |  28 Feb 2018Text size  Decrease  Increase  |  
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SYDNEY - [AAP] Adelaide Brighton's (ASX: ABC) full-year profit has slipped 2.3 per cent to $182 million after the cement and masonry supplier took a $17.7 million earnings hit from the discovery it had been underpaid for some supplies.

The company on Wednesday said revenue for the 12 months to December 31 jumped 11.7 per cent to a record $1.56 billion thanks to acquisitions and strong demand for construction supplies in east coast markets.

But its bottom line was hit by the $17.7 million of impairments, which were larger than the $14 million it flagged when it alerted the market to the issue in November.

Adelaide Brighton said then it had hired forensic accountants KPMG to look at whether an employee could have been involved in transactions that may have deliberately hidden customer underpayments for supplies over a sustained period.

The company on Wednesday said KPMG's analysis was complete and that it had improved its compliance and risk management systems, but did not confirm employee involvement.

"While the financial impact of the discrepancies has been quantified, investigations are continuing," Adelaide Brighton said in a statement.

"Adelaide Brighton is also continuing its efforts to recover amounts due."

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At 1214 AEDT, Adelaide Brighton shares were down 44.5 cents, or 6.4 per cent, at $6.545.

Nonetheless, underlying profit was at the upper end of guidance, up 5.4 per cent to $197.7 million.

Adelaide Brighton said robust residential activity, along with increased non-residential building and infrastructure activity, had boosted its full-year performance in Victoria, NSW and Queensland--particularly on the Gold Coast and Sunshine Coast.

It said demand picked up in SA due to major infrastructure projects and had stabilised in WA.

The company forecast higher sales volumes for cement and clinker as well as pre-mixed concrete and aggregates.

ADBRI'S ROBUST FIRST HALF

* Net profit down 2.3pc to $182m

* Revenue up 11.7pc to $1.56bn

* Final dividend up 0.5 cents to 12 cents, fully franked

* Special dividend flat at 4.0 cents, fully franked

 

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is an AAP journalist.

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© 2021 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

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