Fiscal Year 2004/05 has been a terrific year for our specialist businesses with Coates Shorco, Prestige and Conrent posting outstanding results further validating Coates strategy of acquiring and developing specialist businesses. These businesses have benefited from fleet reinvestment and alignment with the Coates brand. A series of ‘sweep & plug’ acquisitions have been integrated into our existing business units and significantly boosted our capability and capacity across Australia.

Our other specialist business, Coates Offshore, achieved great results last year with profit up by 15% and is poised for further growth in line with the expansion of the offshore oil and gas industries globally. That growth is set to continue for the foreseeable future as long term demand drives continued exploration and production activity, particularly in new deep water oil & gas fields. That growth has seen Coates Offshore delivering equipment to fields in West Africa, the Caspian Sea, the Former Soviet Union (FSU), the Caribbean and South America as well as maintaining share in our traditional stronghold of the North Sea.

On 1 July 2005 we completed the acquisition of Allied Equipment for a cost of $136.1 million. This acquisition is significant for several reasons. It is our largest ever acquisition and it allows us to take a significant step up in our presence in the mining sector. Our proposition to mining customers is enhanced by our new ability to offer the ‘big yellow iron’ for hire and sale and a synergistic opportunity exists to grow both the Allied business and our Indonesian business by targeting the growing resource sector in that country.

Following this acquisition, Coates will source approximately 30% of revenue from the resources and mining sector in some form as it becomes our largest market segment, further reducing our reliance on the construction sector.