Engineering and construction group Kentz Corporation (LON:KENZ) said this morning that it was expecting revenues and profits for 2010 to be significantly ahead of current market expectations for the year. The news was enough to push shares in the group up by 6.5% to 378p.
In a trading statement ahead of its full year results for 2010, which are due in March, Kentz said that the strong first half performance reported in September 2010 had continued throughout 2010. It saw significant natural growth from current contracts and increased demand for services across its three Global Business Units (GBUs); Engineering, Procurement and Construction (EPC), Construction, and Technical Support Services.
The backlog at the end of the year was US$1.6bn, which was in line with the level reported at the half year and up from US$1.497bn at the end of December 2009. Total order intake to backlog between January and December 2010 was US$1.253bn. Kentz said the EBIT and pre-tax profit margins for 2010 were expected to be in line with market expectations.
Hugh O’Donnell, the chief executive of Kentz Group, said: “I am pleased to report that Kentz has finished the year in a very strong position. Despite the challenges within the global market place, the Kentz strategy has delivered significant growth through the globalisation of our Business Units. Pricing pressure in the Middle East caused some delay to EPC projects in the first half of the year, but a number of these projects are moving ahead now and we have seen a substantial uplift in activity in the second half.
He added: “Kentz continues to deliver projects in challenging and remote locations and this period has seen us add new geographic areas to our operations including Papua New Guinea, the Dominican Republic and Iraq. Importantly, these projects are with existing Kentz clients and our focus on delivery for core customers has proven to be the right approach; with the signing of two new framework agreements with ExxonMobil and Shell during 2010. Natural growth in current contracts has been a continuing feature of our business and coupled with a growing number of longer term opportunities gives us confidence that the outlook for 2011 will be ahead of our previous expectations.”
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