Industrial equipment maker Bradken is heading into the new financial year with a record order book and plans to grow capacity.
Bradken on Tuesday posted a 49 per cent growth in net profit for the year to June 30 of $100.5 million, up from $67.6 million in the previous corresponding period.
Investors welcomed the news, pushing the company’s shares up 11 per cent, or 58 cents, to close at $5.74.
Bradken manufactures equipment for the mining and rail industries, and is heavily exposed to the iron ore, copper, gold and steaming coal markets.
Managing director Brian Hodges said the company’s earnings outlook remained unclear because of uncertainty around global markets and how that affects the growth of the resources sector.
But despite the uncertainty, Bradken plans to lift its production capacity.
Mr Hodges said a record number of orders will have Bradken operating at full capacity in the first half of the 2012/13 financial year.
“(This) will be a year where our capacity will increase by about 10 per cent, and if the global economy stays strong it should be quite a successful year for us,” Mr Hodges told AAP.
“But of course, (global uncertainty) affects our order books if it does trend downwards.”
Bradken plans to curb company expenditure until the outlook appears clearer.
But Mr Hodges said that will not affect Bradken’s expansion plans overseas, including expanding capacity at its China plant.
“We will complete things we’ve already committed to, but we’re not making any new commitments at this stage until we see how the global situation unfolds,” he said.
Bradken’s shares hit an eight-week high after its results were released.
Patersons Securities analyst George Galanopoulos said the stock was regaining value lost after investors punished the company when it downgraded its full year profit guidance in April.
“The stock was trading a lot higher (then), and now it’s coming off a low-base,” he said.
Mr Galanopoulos said investors also welcomed the fact Bradken had met its earnings guidance, and that its balance sheet remained in the black.
“Although their outlook was cautious, there was enough there to indicate things are not going to collapse,” he said.
