Leighton sees billions in contract work

Leighton Holdings Ltd posted profit and revenue growth in first quarter of this financial year and forecast contract wins potentially worth billions of dollars in the near future.

The construction company said on Thursday profit after tax for the three months to September 30 was $313 million, unaudited, up 25 per cent on the previous corresponding period.

Revenue for the first quarter of 2009/10 was $4.5 billion, up 10 per cent, while work in hand had risen by $1.2 billion since June 30 to $38.2 billion.

"There is about $4 billion worth of contracts that we are sitting there as preferred, and I expect that there will be significant announcements made in the next couple of days," chief executive Wal King told journalists after the company's annual general meeting.

Leighton had won about $1 billion worth of work as a result of the federal government's stimulus spending on infrastructure, "and there's a lot more coming", Mr King said.

A further $1 billion worth of work on hand relates to the Gorgon liquefied natural gas project offshore Western Australia, and he expressed confidence another $1 billion worth of contracts would be won "in the very near future".

Despite a downturn in the debt-laden construction industry in Dubai, Mr King said the company stood to profit from a large amount of work scheduled for other Middle Eastern countries.

"Dubai will take years to recover but the rest of the Middle East ... there is more work up there now than you can possible deal with," he said.

Despite the positive outlook, Leighton did change its previous guidance for a full year net profit of about $600 million, which would be a return to 2007/08 performance levels.

A return to profit growth is forecast in the 2010/11 financial year. It posted a 28 per cent fall in annual profit in 2009/10 to $440.04 million.

Thursday's annual general meeting did not see a predicted shareholder backlash over Leighton's remuneration report, with about 90 per cent of proxy votes cast in favour.

A similar percentage voted in favour of the granting of 150,000 share options to Mr King as incentives.

"If that's a firestorm I've got a pretty easy life haven't I?" Mr King said after the meeting.

The 65-year-old industry veteran has had his contract with Leighton amended to allow him to extend his 22-year tenure as CEO beyond June next year.

He said after the meeting that a successor would more than likely come from inside the company.

Meanwhile, Leighton has no firm position on the future of its relationship with Macmahon Holdings Ltd, Mr King said.

The two companies are partnering on large infrastructure projects, and have scrapped an earlier requirement that Leighton obtain Macmahon's written consent before extending its shareholding in the latter beyond its current 19.9 per cent.

"We haven't got a firm position, we might go up, we might stay where we are, or we might sell out," Mr King said.

Leighton shares closed down 17 cents at $33.81.