CPB-ROC

By Glenn Dyer | More Articles by Glenn Dyer

The newsagency story said it all about Brisbane-based Campbell Bros, one of the country's fastest-emerging mining services groups.

"Laundry product and chemical maker Campbell Brothers" was yesterday's story on the company's AGM, described Campbell. And yet its growth is coming from the Laboratory services business here and in major mining markets throughout the world.

The lab services business is the growth part of the company, which does have a rump of its old mainstays in chemicals and laundry products.

Whatever, the company told shareholders yesterday that it was ‘'well-positioned for further growth in fiscal 2008".

Chairman, Geoff McGrath, said the company's Laboratory Services division intended to expand organically and was also examining further acquisitions in Europe, Asia and North America.

Mr McGrath said that division would "continue to capitalise on the competitive advantage it holds in all its markets".

The CEO, Greg Kilmister, told the meeting that Campbell was looking to ALS for higher earnings in the 2008 year, with a full year's contribution coming from acquisitions made last financial year and new businesses planned.

"Robust growth" was the phrase used at the AGM.

The division is moving away from being highly dependent on the resource industries and is expanding into environmental and pharmaceutical services. Furthermore, mining will be less than 50 per cent of revenues this year.

Mr McGrath also said that the division was "examining further acquisitions to diversify into new analytical service markets in Europe, Asia and North America".

"The company has started the new financial year in fine shape," he said.

"We are positioned for further growth through well-defined strategies we have in place.

"The execution of these strategies is measured against clearly defined objectives."

In May, the manufacturer announced a record net profit, helped by acquisitions and the sale of its pest control and cleaning services business.

Campbell Brothers' net profit rose 69.5 per cent to $59.1 million in the year to March 31.

That result included an after tax profit of $7.4 million on the sale of the company's Services division.

Net profit after tax, excluding the gain on the sale, was $51.7 million, an increase of 51.1 per cent on $34.2 million the previous year.

Mr McGrath said the chemicals division was coping with increases in raw material, fuel and freight costs by improving operational efficiencies and "keeping a tight rein on costs".

In addition, the one-off costs for its rewards and distribution division were almost finished and gains were emerging from the consolidation of its national distribution and centralisation of its warehouses.

Mr McGrath said the true value of the division would be seen in the second half of the current year.

The shares jumped by around two per cent, or 63c in afternoon trading to $27.13.

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Meanwhile, investors shrugged off what seemed to be slightly disappointing news in the second quarter production report from Roc Oil Co.

The shares edged up 10c yesterday to $3.46 as they took heart from the stronger revenues, rather than the flattish production performance in the second quarter.

However, that sales boost resulted from more oil being sold due to the timing of shipments, as opposed to having more available to sell.

Nevertheless, at the end of comments from CEO, John Doran, for the quarter and the half, there was a warning about production levels for the full-year, thanks to the flat second quarter.

The oil and gas producer said: "Based on year-to-date results, production for the calendar year is expected to be at the low end of the 10,000 to 12,000 barrel of oil per day (bopd) range".

Roc Oil said its production in the three months to June 30 saw output of 789,543 barrels of oil equivalent (boe), up marginally from the 782,544 boe in the first quarter of 2007.

First production from the Enoch field in the North Sea and a nine per cent increase in output from the Cliff Head operation off the coast of Western Australia, compensated for sharp declines at other operations.

"Enoch, a new oil and gas field in the North Sea, started production and achieved target rates soon afterwards," John Doran said.

However, strong sales helped offset the flattish second quarter production result, with Roc reporting total sales revenue of $60.4 million in the second quarter, as compared to $38.9 million recorded in the first quarter.

Roc Oil attributed the strong sales to increases in global and regional crude oil prices, with the company receiving an average price of $78.98 for the quarter.

On the exploration front, Roc Oil said a program off the coast of WA resulted in three discoveries. Meanwhile, the company has started drilling on its permits in Angola.

"A three well exploration program in the offshore Perth Basin resulted in three discoveries, two of which may prove to be commercial, subject to further evaluation," Mr Doran said.

The company said that: "Total sales revenue of $60.4 million; up 55% compared to $38.9 million in the previous quarter, reflecting strong increases in global and regional crude oil sales prices and timing of cargo liftings. The average realised oil price across all of ROC's production assets was $78.98 (US$ 65.48), up 17% from 1Q 2007.

"Total working interest production of 789,543 BOE (8,676 BOEPD); up 1% compared to 782,544 BOE (8,695 BOEPD) in the previous quarter.

"Total sales volume of 769,789 BOE; up 34% compared to 574,409 BOE in the previous quarter due to timing of cargoes."

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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