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UPDATE 1-Australia's Broadspectrum triples H1 profit, ups guidance, begins buyback

Published 15/02/2016, 09:59 am
© Reuters.  UPDATE 1-Australia's Broadspectrum triples H1 profit, ups guidance, begins buyback
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(Adds buyback, shares, CEO quote)

SYDNEY, Feb 15 (Reuters) - Australia's Broadspectrum Ltd BRS.AX , which runs the country's offshore immigration detention camps, said first half net profit tripled, upgraded its earnings guidance and announced a share buyback as it fends off a takeover bid from Spain's Ferrovial FER.MC .

Net profit came in at A$25 million ($18 million) for the six months to Dec. 31, up from A$8.4 million, the company said on Monday, citing a host of government contracts including one with the Department of Immigration and Border Protection.

Broadspectrum upped its forecast for full-year pre-tax earnings for the second time in two months, saying it now expects a result of up to A$300 million, bettering the previous year's A$265 million.

The company formerly known as Transfield Services added that it will buy back 10 percent of its shares over the next year.

"This is a very positive first half result, particularly in light of the difficult operating conditions we're experiencing in some of our sectors," Chief Executive Officer Graeme Hunt said in a statement.

Hunt is seen as hoping the combination of an earnings upgrade and a share buyback will increase the appeal of the company's shares, which have been battered along with the mining sector the company has historically relied heavily on for earnings, leaving it vulnerable to takeover.

In December, Spanish infrastructure giant Ferrovial offered A$692 million for Broadspectrum, down from a A$1 billion offer it made a year earlier and which Broadspectrum rejected.

Broadspectrum shares have continued to trade below that second, lower offer of A$1.35 per share as investors fret about the company's exposure to the mining sector and human rights concerns at its detention camps, closing at A$1.07 on Friday.

On Monday, the company said first half sales slid 1.8 percent to A$1.9 billion due to "challenging conditions in the oil and gas and utilities sub-sectors". It did not declare an interim dividend, consistent with the previous first half.

($1 = 1.4069 Australian dollars)

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