Archive | Opus

WSP secures Malaysian stake on way to full Opus takeover

Montreal-based international property consultancy WSP Global Inc formally offered $1.78/share yesterday for the whole of Opus International Consultants Ltd – up from the 99c/share market close on Friday – after securing agreement to buy out the Malaysian holder of 61.2% of Opus, UEM Edgenta Bhd.

Opus also announced a lift in half-year earnings yesterday and can pay a dividend of up to 7c/share before the buyout goes through, effectively raising the takeover offer to $1.85/share. The shares had been stuck around a dollar since early February and rose from 99c on Friday to $1.70 yesterday.

Curiously, UEM Edgenta named a replacement director to Opus’s board only last Wednesday – Khazanah Nasional investment division director Elakumari Kantilal – although the takeover deal is as good as done.

UEM Edgenta’s sellout requires shareholder approval but, as part of the lockup agreement yesterday, its 69.14% shareholder, UEM Group Bhd, agreed to vote that holding in favour of the deal. UEM Group is a wholly owned subsidiary of the Malaysian Government’s strategic investment fund, Khazanah Nasional Bhd.

Opus came into existence 20 years ago, a year after the New Zealand Government sold the business, as Works Consultancy Services Ltd, to Malaysian Government-controlled Kinta Kellas Ltd.

The takeover is through WSP NZ Acquisition Ltd, a local company owned directly from Canada and incorporated last Thursday. In New Zealand, the WSP branch dropped the Parsons Brinckerhoff acronym (PB) from its name in March and it’s now just WSP NZ Ltd.

But WSP internationally includes the Parsons Brinckerhoff businesses, bought by UK construction & infrastructure group Balfour Beatty plc in 2009 and sold to WSP in 2014.

The WSP parent company reported strong second-quarter results last Thursday, lifting net earnings attributable to shareholders by 20.3% from a year ago to $C62.8 million, or 17.3%/share to C61c.

WSP said its offer valued Opus at $263.2 million. At $1.85/share, that value rises to $273.6 million.

Independent chair Keith Watson said Opus’s cash position supported a fully imputed interim dividend: “However, in view of the latest announcement of a takeover offer, the directors have deferred declaring an interim dividend. This will enable them to take advice on the offer and the appropriate level of interim dividend to be declared.”

The Opus board has appointed a sub-committee comprising Mr Watson (appointed independent chair on 1 August) and the other independent directors (Alan Isaac & Sam Knowles), to respond to the takeover notice.

Strong NZ earnings but losses in overseas markets

A few hours after the takeover was announced, Opus released its half-year results – adjusted net profit after tax up from $917,000 to $6.2 million, and operating ebit up from $2.5 million to $11.4 million. Group revenue fell 4.2% to $226.8 million ($236.8 million) but was flat on a constant currency basis. The $18.2 million cashflow from operations was the highest half-year result since Opus became a listed company in 2007.

Mr Watson said the company’s new strategy, which focuses on 3 global market sectors – transport, water & buildings – was driving an improved financial performance during a period of difficult operating condition: “In a competitive global market, focusing on the 3 market sectors has enabled us to leverage our expertise for clients no matter where they are. We have become more agile & effective, more focused on human-centred design & innovation, and we are developing stronger alliances.”

Chief executive Dr David Prentice said the New Zealand business continued to be very strong, delivering $140.6 million in revenue and an operating ebit of $18.5 million, led by a buoyant transport sector.

Opus had made important changes to the business, with experienced financial services leader Ian Blair recruited as managing director of Australia & New Zealand.

“Our pipeline for 2017 & beyond includes a collaboration with a consortium of companies to deliver the set-up phase of the Northern Corridor improvements project in Auckland for the NZ Transport Agency, and continued work to support the Kaikoura community to restore its transport links, especially along State Highway 1.

“In addition, Opus is now on 3 major water panels in Christchurch, Auckland & Wellington, a move that will benefit New Zealand communities and help the local councils move their water infrastructure into the future.”

Opus’s North America business reported $33.6 million in revenue and, while there was an operating ebit loss of $600,000, this was a $5.9 million improvement. Dr Prentice said this reflected management actions to improve operating efficiencies and align focus on driving growth in Opus’ 3 global market sectors. Bidding activities had resulted in a record future work pipeline for the water sector in North America.

The UK business, which encountered Brexit-related headwinds, generated $27.3 million in revenue and an operating ebit loss of $100,000. Dr Prentice said conditions in Australia continued to be trying and the business recorded revenue of $21 million and an operating ebit loss of $2.2 million.

WSP Australia-NZ
UEM Group
Opus NZ

Attribution: Opus release & results, WSP, UEM.

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Opus plummets to a heavy loss (but doesn’t draw your attention to that)

Opus International Consultants Ltd was sufficiently embarrassed that it managed to issue a release yesterday without mentioning that its bottom line plummeted $39 million (245%) from a $15.9 million profit in the first half of 2015 to a $23 million loss this time round.

Pretax, it dropped to a $22.2 million loss ($19.1 million profit). Basic & diluted earnings/share were a negative 16c (11c profit last year).

The company presentation disclosed that net profit for the June half dived 88%, from $7.7 million to $900,000, and the company attributed its decline (in its release) to a mixed performance arising from “difficult economic conditions in Canada & Australia and weaker margins in New Zealand”.

Notes to the accounts said the 2016 net profit figure excluded impairment of $24 million, and the 2015 figure excluded deferred consideration release of $8.1 million.

Revenue fell 7.4% to $236.8 million ($255.7 million) and ebit (underlying operating earnings before interest & tax) fell 78.7% to $2.5 million ($11.6 million).

Group net cashflow went from a negative $15.5 million in the first half last year to a negative $8.7 million this year. Gross debt:equity rose from 58% to 90%, net debt:equity from 20.5% to 27.3%, outside the company’s target range.

Opus chair Kerry McDonald both the Australian & Canadian operations reported losses – Australia $24.8 million revenue and a $1.7 million operating ebit loss, Canada $37.2 million revenue and an operating ebit loss of $6.5 million.

“Given the difficult business environments with the decline in oil & gas prices, and resource prices generally, we reassessed the value of our operations and impaired the carrying value of Australian assets by $A4.2 million and Canadian assets by $C17.8 million.”

Chief executive David Prentice said: “Our New Zealand & UK businesses continue to show resilience despite subdued global trading conditions and have underpinned the group performance. New Zealand had a solid start to the year, where better diversified earnings partly offset the negative impacts of reduced roading contract margins from the retendered NZ Transport Agency’s network outcome contracts. The business delivered $139.1 million in revenue (a 4% decrease) and $14.9 million in operating ebit (a 22% decrease).”

Despite the challenges, directors said Opus’ cash position was strong and operating cash, ahead of last year, supported a fully imputed 2c/share interim dividend. The dividend policy is to pay between 50-70% of net profit after tax adjusted for non-trading items such as impairment.

Asset management services account for 40% of Opus’ total revenue, most of it delivered in long-term annuity contracts. The company has diversified internationally over the last 10 years, with an emphasis on transport asset management. 61% of its clients are in the public sector.

Attribution: Company release, accounts, presentation.

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Opus performs strongly despite hiccups

Opus International Consultants Ltd increased net profit after tax for 2014 by 15% to $26.2 million on a 17% revenue gain to $539.6 million. The return on equity was 18.4%, compared with the NZX 50 average of 11.5%.

Operating cashflow rose 29% to $32.1 million, and the company increased its full-year dividend by 13%.

However, chairman Kerry McDonald said yesterday the result was significantly impacted by accounting adjustments & a previously reported $45 million project loss.

Ebit was $37.4 million (up 9%), but underlying ebit of $32.6 million was down 2.8%, affected by weaker performances in New Zealand & Australia.

The difference between ebit & underlying ebit reflects a deferred consideration release of $11.5 million in Canada and an impairment of goodwill adjustment of $6.7 million in Australia.

Attribution: Company release.

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Opus International Consultants prepares to list

Published 27 May 2007

Infrastructure professional services consultancy Opus International Consultants Ltd has appointed First NZ Capital Securities Ltd as lead manager Macquarie Securities (NZ) Ltd as co-lead manager for its proposed listing.


Opus is the largest New Zealand-led infrastructure consultancy, employing 2000 people at 65 offices in New Zealand, Australia, Canada & the UK.


Projects recently completed where Opus has had significant roles include the Wellington inner city bypass, the Esmonde Rd interchange in Auckland and the remodelling of the Massey University Student Union Building in Palmerston North.


Projects in progress include redevelopment of Porirua College, the Cambridge bypass, Transmission Gully out of Wellington, the Christchurch southern motorway and the refurbishment of London Underground railway stations.


Opus is responsible for the asset management of a large part of New Zealand roading networks, including over 50% of the state highway network.


Under the name of Works Consultancy Services, the Government sold the former Ministry of Works business in 1996 to Kinta Kellas Ltd of Malaysia.


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Attribution: Company release, story written by Bob Dey for this website.

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