Found it: Churchill poised to expand
Paul Marck
Journal Business Writer
Edmonton
Churchill Corp., the Edmonton-based commercial and industrial construction
company, has set its sights on the East. And it's also developing an appetite
for new acquisitions.
Hank Reid, Churchill's president, said the company's three divisions are
embarking on an aggressive growth strategy to drive up both earnings and
shareholder value.
Churchill (ASE: CUQ) has 100-per-cent control of both Stuart Olson
Construction and Insulation Holdings, the latter an industrial insulation and
plant maintenance firm. It also has an 89-per-cent share of Triton Projects, an
industrial mechanical firm.
Reid told the Edmonton Society of Financial Analysts Friday that there are
distinct plans for each of its holdings.
For instance, Stuart Olson, the largest of the companies with $155 million in
earnings last year, will grow incrementally and internally as Churchill takes
advantage of the acceleration of commercial and institutional expansion that is
heating up the construction economy.
"For now we intend to take advantage of the Western Canadian market and
later expand into Ontario and the northwestern United States," Reid said of
the groundwork he expects to take root over the next five years.
Plans for Insulation Holdings and Triton Projects should grow because of
increased activity in natural gas, chemical, utilities, pulp and paper, pipeline
and mining industries in the West.
Churchill also plans to go on an acquisition spree to boost the industrial side.
"It's a matter of finding like companies with good management that will fit into
our culture," Reid said.
Insulation and Triton had combined revenues of $53 million last year.
Overall, the financials show Churchill poised for continued success.
Construction revenue has grown from $130 million to $210 million over the
past four years, net earnings have gone from a loss of nearly $2 million in
1995 to net earnings of more than $4 million last year, and return on equity
over the period has increased 44 per cent.
Reid said it's a realistic goal to see it achieve overall revenues of $300 million
by 2004.
The company's more immediate goal is to increase its share price, which
peaked at $1.40 last June. It dropped to 72 cents by January, but has steadily
climbed close to its high-water mark, closing Friday at $1.38, up five cents.
Listing on the Toronto Stock Exchange is one possibility to increase
Churchill's exposure -- and share price -- as is improving its investor relations,
"and telling the great Churchill story to the masses," Reid said.
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