Programmed Maintenance Services went against the trend and rose yesterday despite reporting a 58% drop in annual profit, including one off items.
Investors focused more on the profit before one offs, which rose to $17.5 million from $14.1 million and a forecast improvement in earnings in the 2012 financial year.
The company’s net profit for the year to March 31 was $10.4 million, down from $24.9 million, which included an $11.8 million loss from the company’s exit from the UK market.
The shares rose 7c or 3% to $2.02 after the results were released in the morning to the ASX. They then fell back to close steady on $1.95.
Earnings before interest, tax and amortisation (EBITA) from continuing operations were $41.6 million, up 26% on $56.4 million in the previous corresponding period.
The company, which provides staffing, maintenance and project services, said it expected group earnings to increase in the current fiscal year due to stronger demand and a lower cost base across all its divisions.
Revenue from continuing operations rose 6.8% to $1.22 billion.
The company will pay an unchanged fully franked final dividend of 6c a share. That makes a steady full year payout of 9c a share.
The company said demand in the retail, commercial and light industrial sectors remained tight, and many retail and commercial clients were restricting maintenance and project spending.
New opportunities were under development in the public sector, Programmed said.
Demand in the resources sector had increased, with more offshore oil and gas opportunities forecast in fiscal 2012, it said.
The general staffing sector was recovering, with leading indicators pointing to increased labour demand, but small and medium sized businesses generally remained cautious, Programmed said.
"With stronger demand projected for our services and a lower cost base in all three divisions than two years ago, we are expecting improved earnings in fiscal year 2012."
"Demand in the retail, commercial and light industrial sectors remains tight. Whilst new opportunities are being developed with the government sector, many retail and commercial clients are cautious about their prospects and are restricting maintenance and project expenditure.
"Demand in the resources sector has increased with additional offshore oil and gas opportunities forecast in FY2012.
"The general staffing sector is recovering, with leading indicators pointing to increased labour demand, but small and medium size businesses generally remain cautious.
"Overall, the group’s earnings are expected to improve in FY2012, with stronger demand projected for its services and a lower cost base in all three divisions than two years ago."
Managing director Chris Sutherland said improved earnings in the second half of fiscal 2011 came from restructuring, particularly delivering cutting costs in its property services business.
"The group’s improved performance in the second half followed a disappointing first half when earnings were impacted by weaker demand across retail and commercial markets and by reduced manning levels within our marine business due to an industrial dispute," Mr Sutherland said in yesterday’s statement.
And the company revealed that chairman Geoff Tomlinson has told the Programmed board he will not to seek re-election at the upcoming annual general meeting.
The board intends to elect independent director Bruce Brook as chairman, Programmed said and a new director will be sought over the next few months, Programmed said.
