Thomas & Coffey Limited : 2013 Half Year Results ASX Announcement

thomas

V &coffey

To: Company Announcement Office

Australian Stock Exchange

From: Ranjan Rajagopal

Date: 28 February 2013

Subject: Press Release for Half Yearly Results

Dear Sirs,

Thomas & Coffey Llmited

ABN 60 000 263 678

Level 1, Quad 3

102 Bennelong Road

Sydney Olympic Par1< NSW 2127

PO Box 6205 Silverwater NSW 1811

T 02 9008 2000 F 02 9008 2199

www .thomascoffey.com.au

Please find attached the press release with respect to the half yearly report and accounts for

Thomas & Coffey Limited for the half year ended 31 December 2012.

Ranjan Rajagopal

Assistant Company Secretary

pthomas

V &coffey

Thomas & Coffey H1 2013 results

Thomas & Coffey limited

ABN 60 000 263 678

Level 1 Quad 3

102 Bennelong Parkway

Homebush Bay NSW 2127

PO Box 6205 Silverwater NSW 1811

T 02 9008 2000 F 02 9008 2199 www.thomascoffey.com.au

28 February 2013

Thomas & Coffey Limited (ASX:THO), the specialised industriai services company, today announced a loss before tax of

$6.003 million for the six months to 31 December 2012 (H1 2012: $5.069 million loss). This included a loss of $1.137 million (H1 2012: $6.494 million loss) from discontinued operations. A tax benefit for the losses was not recognised for the period. No interim dividend has been declared.

The loss before tax from continuing operations was $4.866 million (H1 2012: $1.425 million profit). The underlying result from continuing operations before redundancy and closure costs of $1.940 million is an EBITDA loss of $0.835 million.

Revenue from continuing operations, comprising maintenance services and engineering and construction project management services mainly far customers in the heavy industry and resources sectors, was $111.4 million (H1 2012: $106.6 million).

Results summary	31 Dee 2012 ($ 000)	31 Dee 2011 ($ 000)
Revenue from eontinuing operations	111,385	106,563
EBITDA (Earnings before interest tax, depreeiation and amortisation) from eontinuing operations	(2,775)	3,836
Profit l (loss) before tax from eontinuing operations	(4,866)	1,425
Profit l (loss) after tax from eontinuing operations	(4,866)	972
Loss before tax from diseontinued operations	(1,137)	(6,494)
Loss after tax from diseontinued operations	(1,137)	(4,546)
Loss before tax	(6,003)	(5,069)
Loss after tax	(6,003)	(3,574)
Earnings per share- diluted (eents) lnterim dividend per share- fully franked (eents)	(5.2) 0.0	(3.1) 0.0

Maintenance Services revenues have decreased by 23% to $59.7 million due to a contraction of maintenance spending by key customers in industriai and mining sectors as a result of lower commodity prices and the continuing high Australian dollar. The lower activity levels and the company's exposure to unutilised labour significantly impacted the profitability of these operations with a lower EBITDA contribution of $2.163 million (H1 2012: $7.279 million).

The revenues for Engineering and Construction project management services, substantially comprising of mine infrastructure area (MIA} works far mining companies increased due to the delivery of a number of MIA projects in the Bowen Basin. The results far the period were negatively impacted by a provision far a contractual dispute resulting in an EBITDA loss of $0.430 million (H1 2012: $0.563 million contribution).

'As foreshadowed at the annual generai meeting in November 2012, this result reflects the multitude of external challenges facing the company and our customers. Volatile mining commodity prices, a strong Australian dollar and variable demand far commodities in the countries to which Australia exports are ali big factors that have affected our operations', said Mr Comb, Managing Director. 'In response to these external factors, in the first quarter of this year, a number of our mining customers implemented significant cast reduction programs to rein in expenditures, including operational maintenance and minor capitai works. As a service provider lo the mining industry, these cast reductions had an immediate and significant impact an the company's results.'

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'Safety remains a key priority far the company and, pleasingly, we were lost time injury (LTI) free far the reporting period and the frequency of total recordable incidents (TRIFR) declined by 17%. The health and safety of our staff, suppliers and customers remain an ongoing focus far the business.'
'One of the challenges facing the company is managing labour utilisation in the short to medium term as the company seeks alternative sources of revenue. This has led to strategie initiatives including gaining "fly-in, fty-out" work in Western Australia and Queensland.'
Mr Comb also said: 'the cast saving program implemented by the company to reduce corporale and regional overheads has resulted in $1.9 million in redundancy and other closure costs, which has contributed to the loss. lt is essential that we move to streamline the business to position the company to be lean and cast competitive, which provides a sound platform for growth. Currently, some $10 million of annua! cast saving initiatives have been implemented with further additional cast savings targeted to be implemented aver the current half year. The full impact of the cast saving program will not be completed until the fourth quarter and accordingly the 2014 year will reftect ali of the cast saving initiatives.'
'These results are disappointing and are a consequence of the short terrn impacts of the reduced maintenance spend in the mining and industriai sectors and the impact of the cast saving program.'

Outlook

The company has undergone significant restructure whereby the company has withdrawn from commerciai construction and implemented costs reduction initiatives to de-risk the business and transition its focus to providing maintenance and project delivery services to the industriai and resources sectors.
'The key issues likely to impact the full year's results will be the global and local conditions and in particular the timing and extent of the projected recovery of the resource sector's expenditure levels. The business is starting to experience some strong signals that maintenance and infrastructure spending is recovering and we are confident that in the medium terrn, the recent capitai investments in the resources sector will transition to increased mine production and activity levels, leading to strengthened demand for maintenance and related services. With the benefits from the cast reduction program and our strong customer base, the company is well positioned to take advantage of any upturn in activity levels in the resources and industriai sectors.'
'Management's key priorities remain to improve the company's eamings; lower its risk profile by leveraging organic growth opportunities with existing customers, particularly in the Hunter Valley and Bowen Basin regions, and improve cast efficiency by maintaining a lean support structure.'

For further information, please contact:

Rex Comb	David lrvine
Managing Director	Chief Financial Officer
Ph: 02 9008 2000	Ph: 02 9008 2030

Thomas & Coffey Limited is a leading supplier of specialised industriai services to the heavy industry, mining, energy, resource and utility sectors. The company provides a comprehensive portfolio of asset and faCJlity maintenance and engineering and construction project management services. Established in

7926, il now employs more /han 750 skil/ed lrades, professional and support services people who opera/e from 75 branches al key commerciai, industriai and mining centres.

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