Coates revenues stable as strategic review continues
By Murray Pollok26 February 2013
Seven Group Holdings said the strategic review of its Coates Hire business – of which it has a 45% share – was “progressing” as it reported a 3% increase in Coates revenues for the six months to 31 December.
Coates reported revenues of A$654.4 million for the six months to 31 December, with profit before interest and tax increasing 2% to A$159.9 million.
Seven, which owns Coates with private equity firm Carlyle, said last November that the two were jointly undertaking a strategic review of the business.
Seven also owns Caterpillar dealer WesTrac and pump and lighting tower manufacturer AllightSykes. Sales at Allight were down 10% to A$91.5 million after a “slowdown in activity, particularly in the domestic market as a result of mining sector customers scaling back on their capital expenditure programmes.”
Seven said it had undertaken a cost reduction restructure of the business in the first half of the financial year – to December 31 – which had resulted in a A$1.8 million cost.
WesTrac Australia, which sells Cat equipment in Western Australia, New South Wales and the Australian Capital Territory, reported sales for the period of A$2.4 billion, up 59%, including the Bucyrus distribution and support business acquired in June 2012. Seven said activity levels were strong, particularly in the iron ore sector in Western Australia.
Meanwhile, WesTrac China, which is one of four Cat dealers in the country, saw revenues fall 28% to US$238.6 million, the result of a sharp reduction in excavator and construction markets.
Seven said; “As a result of this downturn, WesTrac China has undertaken a significant restructure at a cost of $9.5 million to resize the business to meet current market conditions.”