Mining gives Coates Hire a boost
By Murray Pollok19 February 2020
A strong performance in the mining sector in Western Australia helped Coates Hire offset a decline in infrastructure and construction business on the east coast.
Revenues for the six months to 31 December – the first half of Coates’ financial year – were up 2% to A$504 million, with profit before interest and tax (EBIT) down 5% at A$104 million. Rental sales for mining expansion and industrial maintenance projects in Western Australia rose by 26% year-on-year, against a 2% decline on the east coast.
The company, which is owned by Seven Group Holdings, said it was positive for the remainder of the year and would accelerate its fleet investment, with a 10% increase in net capex forecast for the full year. It said it would reduce the average age of its fleet to position itself for further opportunities in the infrastructure market.
Coates revealed that 35 of its staff had volunteered for fire fighting services during the recent bush fires and that the group had contributed A$2.8 million worth of equipment and services to public bodies fighting the fires. Its parent company, Seven Group, has pledged A$5 million in direct support of the effort, while its major shareholder, ACE, has matched that with a further A$5 million donation.
The company has supplied temporary shelters, small tools, generators, and heavy machinery including dozers and graders.
Sister company Allight Sykes, which manufactures lighting towers and distributes gensets, reported a 1% increase in revenues to A$41.2 million for the six months, with a loss before tax and interest of A$0.1 million, compared to a A$1.1 million profit in the previous comparable period.
Westrac, the Caterpillar dealership also owned by Seven Group, reported revenue up 15% to A$1,713 million, driven by a 22% increase in new machine sales and a 12% rise in product support revenue. These increases reflected maintenance activity previously deferred by customers and increased demand for component rebuilds.
The dealership is also building a technical training facility in Collie, Western Australia, to support the adoption of autonomous haulage technology. Seven Group said it would be the only autonomous haulage training facility outside of Caterpillar’s proving ground in Arizona, USA.