Leighton profit improves Construction giant Leighton still expects to make a full year profit of up to $600 million after completing what it said was a pleasing first quarter. Leighton made a net profit of $123 million in the three months to the end of March, it said on Monday. The company is on track to deliver a full year underlying profit within its previously issued guidance range of $520 to $600 million, chief executive Hamish Tyrwhitt said. Chief executive Hamish Tyrwhitt said it was pleasing to report a rise in net profit margin in the quarter to 2.3 per cent compared to the full year 2012 margin of 1.9 per cent. That indicates more money is being earned per dollar of sales. Gearing shot back up from 35 per cent to 47.7 per cent in the quarter after it had been reduced last year. It blamed the higher debt level on having to pay equity in the troubled BrisConnections (toll road) and the final dividend payment, each of $200 million, together with seasonal deterioration in working capital. It also reflects an increased level of net project underclaims (unpaid debts), it said, which in recent years have been due to its loss-making Middle East operations with the Habtoor Leighton group. Mr Tyrwhitt insisted the company had detailed plans in place to reduce the underclaims and expect resolution on a number of them this year. Work in hand was $42.2 billion, with more than $4 billion of work awarded during the period, but below the $43.5 billion it had at the end of 2012. "We are not targeting top-line growth, rather we are onboarding projects with good margins as demonstrated by a closing project margin-in-hand of over 10 per cent," he said in a statement. The net decline of $1.3 billion from December 2012 reflects this discipline but also indicates a softening in the overall level of contract awards in construction and contract mining. Subject to market conditions, Mr Tyrwhitt said Leighton remained on track to deliver a full year underlying net profit within previous guidance of $520 million to $600 million and a gearing level within the target band of 25 to 35 per cent by year-end. Leighton shares were up 21 cents, or 1.1 per cent, to $19.22 at 1400 AEST.