Enginneering company Bradken has announced expansion plans after posting an 18 per cent first half profit drop.
Source
AAP
UPDATED 3:24 PM - 11 Feb 2014

Bradken shares have tumbled after the engineering firm announced its half yearly profit had dived 18 per cent.

Bradken's net profit after tax fell to $38.1 million for the six months to December 31, from $46.6 million for the same period the previous year, due to a drop in sales.

Earnings also fell 18 per cent to $86.2 million.

The disappointing result soon sparked a dive in Bradken shares.

At 1430 AEDT Bradken shares had fallen 9.6 per cent, or 50 cents, to $4.71.

Managing director Brian Hodges said conditions had been challenging during the first half but the company had managed to slightly exceed its guidance of earnings before interest, tax, depreciation and amortisation of $85 million.

Mr Hodges said mine production levels were continuing to increase and Bradken expected sales to improve through the second half.

He said the company was also investigating ways in which it could expand.

"With mining growth steady, Bradken is actively pursuing opportunities which increase our scale or diversify our consumable product offering, provided they fit with our business model," said Mr Hodges.

The company had recently made a non-binding proposal to Austin Engineering to acquire all of the ordinary shares in the company that it does not currently own.

Mr Hodges said the approach was made before Austin Engineering recently announced its capital raising and was dependent on the company's full year earnings being in line with forecasts and results of due diligence.

The company believed the expanding US economy was supporting growth in energy and capital products, as well as domestic infrastructure such as rail and construction.

Due to the expansion in the US economy and the possible Austin Engineering acquisition, Bradken has forecast full year earnings of $180 million.