Wagners’ Profit Lifts 20pc Across First Half

The building crisis hasn’t been bad news for everyone with construction materials and services company Wagners posting a 20 per cent lift in group revenue for the first half of the 2024 financial year.

The Toowoomba-based Wagners Holding Company reported to the ASX group revenue of $264.6 million, with this growth “predominantly driven by improved market conditions in its construction materials and services off the back of strong customer demand, improved asset utilisation and contribution from project work”, the company said.

Wagners is a producer of cement, concrete, aggregates, new generation composite products and are also providers of transport services, precast concrete and reinforcing steel.

Composite fiibre technology poles and crossarm volumes in Australia and New Zealand also increased, it said. 

Group operating EBIT was $21.1 million as improved pricing, along with implemented cost-control measures, delivered sustained margin expansion.

This was despite an $11.3-million increase in operating costs in line with expanded operations, predominantly labour as well as repairs and maintenance. 

The company said net profit after tax was $2.8 million, negatively impacted by the external failure costs loss ($1 million); EFC impairment ($5.7 million); and derivative mark-to-market adjustments ($1.8 million).  

But Wagner’s core CMS business grew its first half 2024 revenues by 22 per cent to $233.9 million compared with the same period last year.

This reflected “strong underlying trading conditions and a robust demand environment in south-east Queensland overall, notwithstanding some partial offset from adverse weather experienced during the half,” Wagners said.

“Importantly, both underlying volumes remained strong as well as an observed notable improvement in Average Selling Prices during the period—particularly concrete and cement.

Composite Fibre Technologies revenues also grew, 9 per cent up on last year, mostly driven by strong crossarm and power pole demand in CFT Australia and New Zealand.

“This result was partially offset by losses incurred in CFT USA, as the company continued to grow capability and efforts to establish consistent product sales, negatively impacting segment profitability and offsetting improvements in CFT Australia and New Zealand,” according to Wagners.  

▲ Wagners has put the brakes on its ‘green’ concrete operations.

It said that after a strategic review, and due to insufficient commercial support, the company decided to significantly scale back its Earth-Friendly Concrete operations. 

“The company will protect the intellectual property until the value of the technology and product is recognised by industry,” it said.  

Looking ahead, the company reiterated its guidance of January that market conditions in the second half of the year were anticipated to be similar to the first half with an EBIT expected to be consistent with the second half of the 2023 financial year.

It expects a group operating EBIT in the range of ~$31 million to $34 million.

Within Wagners’ core CMS segment “a strong operating environment is expected to continue throughout the remainder of 2024,” the company said.

“Growth in cement volumes experienced in the first half are expected to remain steady during the second half; margin expansion is expected in cement and concrete, with improved pricing and implemented cost control measures; and improved margins within bulk haulage business also expected, following introduction of new fleet improving productivity.

“Completion of a precast tunnel project in mid-second-half is expected to impact fourth quarter earnings.”