More Fulton Hogan staff have become shareholders as the company continues to rack up impressive profits. Photo / Hayden Woodward
More Fulton Hogan staff have become shareholders as the company continues to rack up impressive profits. Photo / Hayden Woodward
Fulton Hogan blooded 309 new staff shareholders in the latest financial year as the engineering and civil construction giant delivered another record profit and boosted its dividend payout by 46 per cent.
A further 216 existing employee shareholders took an opportunity to acquire additional shares as Fulton Hogan looks toretain staff given it has a record $8.5 billion of new work in the pipeline over the next few years.
The private company, whose major shareholders include the founding Fulton and Johnstone families, posted a net profit of $301 million in the year to June 30, up 4 per cent on $298.2m in 2021.
That saw total dividends to shareholders jump from $99.1m to $145.2m in the 2022 financial year, according to the company’s annual report released to the Companies Office on Friday.
At balance date, Fulton Hogan had 3420 shareholders, including 2333 current employees. on the share register.
Despite disruption from Covid-19 shutdowns, the company has lifted earnings since 2019 after it bought Stevenson Group’s construction and quarrying businesses, with net profit up 30 per cent to $289m in June 2021 year, and 27 per cent at $221.9m in 2020.
Revenue climbed 10 per cent to $4.78 billion in the June 2022 year.
Fulton Hogan continues to perform well despite earlier Covid disruption. Photo / Darren Masters
Commenting on the company’s performance, board chair Dean Hamilton and managing director Cos Bruyn said all five of its business units across New Zealand and Australia contributed well.
In New Zealand, the company secured major construction contracts, including Penlink, north of Auckland, and Takitimu North Link, between Waihi and Tauranga.
In Australia, the construction business completed several large projects and the utilities division continued to experience “strong” workflows across its broadband and water infrastructure work. The company made $210m of investments including the acquisition of development land and improvements at Stevenson’s Drury quarry.
“Covid-19 related shutdowns continued to disrupt, with particular impacts on the upper North Island business in New Zealand in the earlier months of the financial year, and also in our Australian utilities business, with the deferral of a number of projects by clients.”
In terms of the outlook, they said the challenges were well publicised – rising input costs (from raw materials to rates), rising interest rates, supply chain uncertainties (materials and equipment), increased geopolitical risks, labour shortages, and increased widespread health risks.
“In contrast, we have a record $8.5 billion of forward work to potentially deliver over coming years. We are confident the team will work through this and strike the right balance of risk and reward, delivering for our customers, and providing a safe and positive environment for our people.
“This year we offered shares to 309 employees for their first time, and in addition 216 existing employee shareholders took up the opportunity to acquire additional shares.
“As Fulton Hogan approaches our 90th anniversary in 2023, we remain positive about our capability and capacity to deliver resilient infrastructure well into our next century of operations, and to continue to deliver for our stakeholders and communities in New Zealand and Australia.”
Fulton Hogan trucks park on Featherston's 'shingle pit' while resealing works are carried out on Fitzherbert St (SH2) in the background.
Given the level of investment during the year, Fulton Hogan’s net debt increased from $111.9 million to $301.9 million, representing 18.5 per cent of shareholders’ equity.
“We remain comfortably within the Board-imposed guideline of net debt being 0.5–1.5x earnings (before interest, depreciation and tax). We continued to maintain financial headroom, with the Group’s total debt facilities at year-end being $910.7 million, with a weighted average maturity of 2.6 years, which is unchanged from the 2021 financial year.
The board declared a 2022 final dividend of 70 cents per share plus a supplementary dividend for non-New Zealand resident shareholders of 12.35 cents per share, paid on October 13. In March, the company paid an interim dividend of 38 cents per share (plus a supplementary dividend of 6.71 cents per share), bringing the total dividend payments for this financial year to 108 cents per share (and supplementary dividend of 19.06 cents for non-resident shareholders).
All up, $145.24m was paid out to shareholders as dividends. In 2020 Fulton Hogan received media scrutiny when it retained about $33.3 million received from the Government’s wage subsidy scheme in response to Covid-19. At the time, the company said it wished to maintain a conservative financial position amid global and local uncertainties.
According to the company’s latest annual report Bruyn was paid $3.49m in 2020, up from $2.02m in 2019.
Overall, the company has 4193 employees earning more than $100,000 per annum, including 44 who earn more than $500,000.
