Profits have tripled for the operator of the Manus Island and Nauru detention centres as the company battles to fend off a hostile takeover from Spain.
Broadspectrum, formerly known as Transfield Services, unveiled its stellar profit result on Monday and cheered investors with news it would buy back up to 10 per cent of its shares.
The company said the jump in net profit to $25 million for the six months to December 31 was bolstered by contracts with the defence, social services and property sectors.
Broadspectrum also benefited from the expected turnaround in its Americas business.
Chief executive Graeme Hunt said the results reflected the continued strong operational performance and improvements across the board.
"This is a very positive first half result, particularly in light of the difficult operating conditions we're experiencing in some of our sectors," he said in a statement on Monday.
Mr Hunt said given the company's strong cash generation, it would buy back up to 10 per cent of its shares on-market over the next 12 months.
The earliest the company will start its share buyback is March 8.
Broadspectrum shares soared on the back of the buyback news, with the stock up 6.0 cents, or 5.6 per cent, to $1.125 at 1502 AEDT.
Mr Hunt reiterated the company's rejection of Spanish infrastructure and services company Ferrovial's $692 million hostile takeover offer.
A Ferrovial spokesman Monday declined to comment on what the share buyback and earnings results means for its bid.
The takeover bid was placed in jeopardy last week after the federal government opened up the bidding for a new, five-year contract to operate the detention centres on Nauru and Manus Island.
The Department of Immigration and Border Protection has extended Broadspectrum's current contract for the centres by 12 months to give it time to open up the tender process.
However the department has told Broadspectrum that it is no longer the sole preferred bidder for the new contract to run the centres.
Broadspectrum chief financial officer Vince Nicoletti believes his company is best placed to run the centres.
"We're quietly confident that we're best placed to secure the new, five-year contract with the DIBP when they award it later this year," he told analysts.
Broadspectrum also reaffirmed last week's upgraded guidance for annual underlying earnings of between $280 million and $300 million, after securing a 12-month contract extension from the federal government.
It also expects underlying earnings for fiscal 2017 to surpass $300 million.
Broadspectrum says it has strengthened its balance sheet by cutting its net debt to $460 million as of December 31 from $569 million a year earlier.
It forecasts net debt will fall to between $370 million and $390 million by June 30 due to continued strong cash flow generation by the business.
BROADSPECTRUM PROFIT SURGES
*Net profit $25.1m vs $8.3m
*Revenue down $1.86b vs $1.90b
*No interim dividend
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