Excuse me for being slightly cynical, but didn't you just love yesterday's Leighton Holdings spin campaign?

Perhaps you didn't notice, so let me refresh your memories.

There was a nice and easy front page profile in The Australian Financial Review that didn't tell us anything more about the company and the latest CEO (the third in a year), Hamish Trywhitt.

There was a lot of grand talk about pushing the company into new areas and similar guff.

It was a sympathetic story for a company that had earned a lot of criticism in the past year, much of it justified from investors, analysts and the media, including the AFR.

Then a couple of hours later (around 9.13 am), the company revealed an upgraded profit forecast for the six months to December.

That was the first bit of positive news for the company for more than a year.

The update ended the flood of bad news and profit downgrades that dominated 2011 and (along with the takeover of German parent, Hochtief by Spain's ACS) helped force the departure of former CEO David Stewart and chairman David Mortimer, plus other senior executives and directors.

In the release, Leighton said its underlying profit for the six months to December will be stronger than previously forecast.

The group says it expects an underlying profit of about $270 million for the six months to the end of December, a better result than its previously forecast $250 million.

Net profit for the period is expected to be about $340 million.

The six months to December 31 represents a transitional period for Leighton, as it moves from reporting for a financial year that ends on June 30 to a calendar based financial year ending December 31.

The improved performance of Leighton in the six-month transitional period was due to improved earnings from its Australian and Asian operations, Mr Tyrwhitt said in Monday's statement.

"The performance of our major projects - Airport Link and the Victorian desalination project - has stabilised and we are making good progress in bringing them to completion," he said.

"We expect to report a net profit after tax of $340 million for the 6-month period to 31 December 2011.

"This comprises our expected underlying profit after tax of approximately $270 million, a capital gain from the HWE Mining iron ore sale (of $232 million before tax or $169 million after tax), offset by non-cash impairments to our investments in BrisConnections ($70 million before tax or $49 million after tax) and the Habtoor Leighton Group ($50 million before and after tax).

"The Company also confirms its previous guidance for the 12 month period to 30 June 2012 at which time we expect to deliver an underlying profit after tax of between $600-650 million, excluding the aforementioned capital gain and impairments," said Mr Tyrwhitt.

Leighton is due to report its finalised results for the six months to December on February 13.

The easy PR in the AFR and then the well-timed upgrade had the desired impact on Leighton shares which rose more than 4% or 83c to close at $21.38.

That was in a market off 1% because of new fears about the eurozone where Leighton's ultimate parent ACS of Spain is a highly indebted huge construction group based in the contracting Spanish economy.

Copyright Australasian Investment Review.
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