ferret's stock to watch: watpac limited

Ferret's Stock to Watch: WATPAC LIMITED
08:49, Thursday, 11 May 2006

PROPERTY DEVELOPMENT COMPANY WITH IMPRESSIVE PROFIT TREND

Sydney - Thursday - May 11: (RWE Aust Business News)
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OVERVIEW
********

Watpac Ltd (ASX:WTP) is continuing an impressive profit trend
evident since 2000.

At the annual meeting last November, chairman Kevin Seymour
said results for the year to June 30 had continued the trend in company
performance over the last six years.

Since 2000, after-tax profit grew by 400 per cent, net tangible
assets had grown from $19.29 million to $39.8 million in 2005, and return
on shareholders' funds has averaged 21.2 per cent.

Work in hand had grown from $81 million to $420 million.

Ferret can bring some of these figures up to date because the
company yesterday reported its after-tax profit for the current year to
June 30 will be significantly greater than that achieved in the previous
2004/05 year.

The 2004/05 year produced an after-tax result of $10.529m and
the forecast for the 2005/06 year is in the range of $15m-$16.m, which
equates to an increase of between 42.4 and 51.9 per cent.

Mr Seymour said in a statement to the ASX yesterday that this was
a pleasing and satisfying result and continued the exceptional growth in
company profitability over recent years.

All divisions are forecast to contribute to the final 2006
results, including an increased contribution from the Construction
Division that has improved on the tough market conditions of the 2004
and 2005 years.

Mr Seymour confirmed that company policy of distributing
dividends to shareholders will continue in line with previous payout
ratios.

He said this financial performance is a direct result of the
implementation of the company's five-year strategy to strengthen its core
activities of property and construction in Queensland, including
growing those activities into the NSW market.

The future implementation of strategy embraces the tactics of
diversification, expansion of property development activities including
the NSW market and acquisitions or mergers of appropriate value-adding
businesses.

Mr Seymour said that "while profits continue their upward trend
the company is focused on creating shareholder value by acquiring
businesses that can bring valuable experience and superior performance to
our current divisions".

The company's core construction business in Queensland continues
to remain strong and has emerged as one of the few remaining Tier One
building companies with a significant presence in the market with record
work on hand.

SHARE PRICE MOVEMENTS
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Shares of Watpac rose 6c to $2.53 yesterday. Rolling high for the
year was $2.62 and low 90c. Dividend is 10c, showing a yield of 3.95 per
cent. Earnings per share is 15.45c and p/e ratio 16.38. The company has
78.7 million shares on issue with a market cap of $194.5 million.

Watpac's latest project is the Skyline Apartments on which work
has already started.

It is a residential development located in the riverside
precinct of Brisbane's CBD.

Skyline will comprise a 190 strata residential unit tower above
two retail tenancies and basement parking.

The apartment complex will include resort style amenities, such
as a gym, steam room, heated pool and BBQ features and will be the only
CBD residential building with a full-sized tennis court.

The apartments are positioned to capture the essence of inner
city riverside living and over 90 per cent of the apartments are afforded
river views.

The project has an end value of $160 million and is being
undertaken as a joint venture between Watpac, Seymour Group and Ariadne
Australia. Prior to construction commitment last July, over $90m of pre
sales were secured.

The project is due for completion in late 2007.

Last November chairman Seymour said there had been many changes
since the previous AGM, all of which had contributed to a positive
outcome for the company.

The highlights of these were led by the successful integration of
its New South Wales construction business, Grant constructions, together
with the focus on its property business, both through increased volume in
Queensland and the commencement of a property division in NSW.

"We have consolidated the management structure of the
refurbishment division with Keybuilt, Watpac's small works company, and
spent considerable time in the reassessment of risk and how we identify
and manage that risk in our business," Mr Seymour declared.

BACKGROUND
**********

Listed on the Australian Stock Exchange in 1985, Watpac is one of
Queensland's leading construction and property groups.

The company's operations encompass a variety of activities
across the eastern seaboard of Australia for a diverse range of clients
and investment groups.

Watpac has successfully delivered more than $4 billion worth
of projects and has been the name behind a number of high-profile
developments across the state.

With a solid track record of year on-year profit growth, Watpac
continues to provide impressive returns to shareholders and is committed
to improving its long-term profitability through a sustainable program of
geographical expansion and diversification.

ENDS

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