WATPAC SEES LIGHT IN MINING SLOWDOWN

CONTRACTING picked up for Watpac (ASX: WTP) this year, as the Brisbane construction and mining services group observed a slump in its mining and civil business.

The company's after-tax profit declined slightly to $17.9 million, from $18.4 million this time last year, despite being underscored by a pre-tax 30 per cent increase in its contracting businesses.

This was from a revenue of $1.22 billion, of which $929 million stemmed from contracting, and the remaining in mining and civil.

Watpac chair Richard McGruther says the company's exploration of new opportunities is helping its balance sheet.

It remains confident in contracting, and has stated resources opportunities will continue to be explored as they come to market.

"The contracting business has substantially increased profitability thanks to an improved market and a strategic approach to our activities," says McGruther.

"We have also maintained a solid profit contribution from the mining and civil business which illustrates the capabilities of this business even amidst difficult operating conditions."

Watpac managing director Martin Monro (pictured) says strong industry relationships is helping the company's mining and civil business hold strength.

"Mining and civil continues to deliver profit despite difficult conditions, and has recently converted several contracts with highly respected industry clients," says Monro.

"This business has focused on quality outcomes for our clients and with four new contracts secured during the reporting period, our strategy has shown that a strong focus on relationships, local networks and operational excellence are valued despite a challenging market.

"Our workbook now reflects desired projects with valued clients and despite difficult conditions the business is in good position for continued profitable project delivery across the sector."

The company will solicit an on-market share buy-back of up to 18.6 million shares, decided upon as 'the most efficient approach' to provide shareholder value.