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Adelaide Brighton's profit slips after underpayments

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Adelaide Brighton’s half-year profit has slipped 2.3 per cent to $182 million after the cement and masonry supplier took a $17.7 million earnings hit from the discovery it had been underpaid for some supplies.

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The company said today revenue for the 12 months to December 31 jumped 11.7 per cent to a record $1.56 billion thanks to acquisitions and strong demand for construction supplies in east coast markets.

But its bottom line was hit by the $17.7 million of impairments, which were larger than the $14 million it flagged when it alerted the market to the issue in November.

Adelaide Brighton said then it had hired forensic accountants KPMG to look at whether an employee could have been involved in transactions that may have deliberately hidden customer underpayments for supplies over a sustained period.

The company said today KPMG’s analysis was complete and that it had improved its compliance and risk management systems, but did not confirm employee involvement.

“While the financial impact of the discrepancies has been quantified, investigations are continuing,” Adelaide Brighton said in a statement.

“Adelaide Brighton is also continuing its efforts to recover amounts due.”

At 1214 AEDT, Adelaide Brighton shares were down 44.5 cents, or 6.4 per cent, at $6.545.

Nonetheless, underlying profit was at the upper end of guidance, up 5.4 per cent to $197.7 million.

Adelaide Brighton said robust residential activity, along with increased non-residential building and infrastructure activity, had boosted its full-year performance in Victoria, NSW and Queensland – particularly on the Gold Coast and Sunshine Coast.

It said demand picked up in SA due to major infrastructure projects and had stabilised in WA.

The company forecast higher sales volumes for cement and clinker as well as pre-mixed concrete and aggregates.

ADBRI’S ROBUST FIRST HALF

* Net profit down 2.3pct to $182m

* Revenue up 11.7pct to $1.56b

* Final dividend up 0.5 cents to 12 cents, fully franked

* Special dividend flat at 4.0 cents, fully franked.

– AAP

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