Analysis and Commentary

Austin Engineering shows how business improvement can pay off

Analysis and Commentary

By Peter Roberts

For those hesitating on embarking on a company improvement process hesitate no longer – Perth mining equipment manufacturer Austin Engineering has shown the massive benefits available from reorganising and streamlining operations and investing in new machinery and manufacturing processes.

The company, which manufactures large dump truck bodies for the mining sector and other equipment, just announced an expected further improvement in first half results for the financial year ending 30 June 2024 (1H FY24).

Austin now expects:

  • 1H FY24 Revenue of $138-$144 million (versus original guidance of $120-140 million)
  • 1H FY24 Underlying NPAT of $12-$14 million (versus original guidance of $10-$12 million)

First half NPAT will be up ~140 percent compared to the prior corresponding period driven by increasing revenue and a sustainable improvement in operational effectiveness across the group stemming from an Austin 2.0 strategy implemented in 2021.

CEO David Singleton, formerly CEO of Austal, said the strategy was expected to continue to drive further increases in average operating margins in future periods.

Singleton, said: “This continues our journey to the target margins and higher revenue base we believe are possible at Austin.

“As a result, we expect the revenue and margin growth momentum to continue into the second half of the year.

“We are very pleased to see the operational impacts of the Austin 2.0 strategy continue to flow through to our bottom line.”

Austal invested in its plants in Perth, Indonesia and the United States, and moved to a four day week – effectively opening up the possibility of a fifth day of working and additional productivity.

The company automated some large scale welding operations and went to a manufacturing model involving centralised production centres with final manufacturing performed close to mining customers operations.

Operating similar factories in several centres also opened up the potential for learnings from one plant to be transferred to others.

Austal has been on a massive growth path since the implementation of the strategy proving yet again – you have to be in it to win it.

Further reading:
Celebrating Australian made – leadership and Austin Engineering


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