Portable housing manufacturers, Fleetwood Corporation Ltd and Nomad Building Solutions Ltd, have posted strong growth in profits for the half year to December 31, boosted by demand from the resources sector.
East Perth-based Fleetwood Corporation increased its profit by 25 per cent to $16 million for the half year, despite concerns about labour availability.
However, revenue was adversely affected by costs incurred during the expansion of the company’s Searipple village in Karratha.
Fleetwood has increased the village’s capacity to 1,400 to cater for major client, Woodside Petroleum Ltd, which has committed to the village until 2010.
While the mining sector drove activity in Fleetwood’s portable housing division, demand from the retirement village sector dropped off due to a subdued real estate market.
Revenue from the company’s recreational vehicles area, which mainly produces caravans, was up 4 per cent to $98.8 million, with four months worth of contracts currently secured.
The company expects its vehicles division to improve in the next half year.
Fleetwood says in its report that labour costs and availability are a significant challenge for the business.
It is considering strategies like automation and recruiting from other labour pools to address the issue.
Fleetwood says it expects further earnings growth in the second half of the financial year, based on the strength of demand from the resources sector.
Meanwhile, Henderson-based Nomad recorded a net profit after tax of $10.4 million for the half year, up 45.7 per cent from the previous period. This was driven by a 53 per cent growth in total revenue ($145 million).
Nomad says a strong order book and recent contracts are expected to provide a solid base for 2009, in which it expects to achieve total revenue of $400 million.
Half of this revenue target has already been contracted.
Its acquisition of Rapley Wilkinson, which is scheduled to be completed this month, is expected to deliver a further boost to revenue in the next half.
Nomad also borrowed $15 million to provide working capital for its operations and the acquisition of Rapley Wilkinson.
The company said there was sustained demand for the group’s products and services across all sectors.
