one 4 the radar screen

LEI recently upgrade its annual results by 55 per cent

SPURRED by huge infrastructure spending and the seemingly endless mining boom, powerhouse contractor Leighton Holdings has unveiled a 55 per cent profit upgrade for 2006-07, sending its shares surging towards the $40 mark yesterday.

Mr Wal king provided some 'colour' into the condition of the infrastructure saector and future outlook which might have some benefit for stocks like BOL,COA,CSH,NHR,SRH,TBG and others

Little wonder private equity players are now 'champing' at the bit to get a piece of the action by buying one or more of the listed players

Here's a snapshot of what he had to say:

The outlook remains very strong for all of our major markets, which are continuing to provide a good level of opportunities in construction, mining and services," chief executive Wal King said.

"We expect to report an increase in net profit after tax for the full year of approximately 55 per cent and a further improvement for 2007/08," Mr King said.

Shaw Stockbroking analyst Brent Mitchell said the improved guidance had boosted the stock.

"It is a significant increase," he said.

Mr King said the outlook came after decades of under investment in infrastructure by governments.

"After decades of underinvestment in roads, rail, water, electricity and telecommunications, a sustained catch-up spend is required and we see this in the current planning for engineering projects," Mr King said.

"Ageing infrastructure, a growing population, a resources boom and issues such as the drought, support a positive long term outlook for infrastructure spending."

Mr King said sustained investment in new mines and resources was also providing a significant level of construction and process engineering opportunities for the group, which in turn will lead to new supply.


Chief executive Wal King yesterday said Leighton expected to report a rise in net profit after tax for the full year to $428 million, against last year's record profit of $276 million, and flagged further improvement for 2007-08.

Leighton's deputy chief executive officer, Dieter Adamsas, told The Australian that mining and infrastructure were expected to remain strong over the next three years.

"If you talk to the likes of Rio Tinto and BHP Billiton, they have strong views of continuing strong returns for their iron ore or coal exports," he said.

"As the major contract miner we are positive of the outlook for the next three or so years."

Mr Adamsas said Leighton had $619 million in cash on its balance sheet and was considering acquisitions.

"We are looking for opportunities to buy things at the right price, but we are not looking at Multiplex," he said.

Leighton's recent acquisitions include CE Marhsall & Sons Earthmoving and a 40 per cent stake in Queensland home builder Devine Homes.