The takeover of the Skilled Group seems to be finally contributing positively to Programmed Maintenance Services (PRG) bottom line.
Programmed yesterday told the market that it returned to the black in the six months to the end of September with a profit of $3.67 million.
The result is a turnaround from the $18.69 million half-year loss in the 2016 financial year.
Revenue rose 89% to $1.34 billion in the six months to September 30 due to the acquisition of Skilled, which was finalised in October.
Earnings before interest, tax, depreciation, amortisation (EBITDA) and non‐trading items jumped 71% to $43.4 million, from $25.3 million for the first half of 2015-16.
The company says it will pay an interim dividend of 3.5 cents a share, down three cents from the first half of the 2015-16 financial year.
Despite that, Programmed’s shares lifted strongly i yesterday and closed up 8% at $1.7.
Programmed CEO, Chris Sutherland the company expects the windfall from Skilled to grow in coming months with the first two stages of integrating the business and its workforce now complete.
“The acquisition of Skilled, only a year ago, was a very important long-term transformation opportunity for Programmed to greatly increase our scale and efficiency and provide for the opportunity to grow services across a much larger customer base,” Mr Sutherland said in yesterday’s statement.
"We are excited to be now moving to the third and most important phase of our plan which is to significantly grow sales over the next three years."
Under that plan Programmed will target outsourced public sector administration contracts, government health support programs such as the National Disability Insurance Scheme, defence projects such as submarine building in South Australia, industrial and mining asset maintenance, offshore oil and gas and public-private infrastructure projects.
The company sats it will also retrain 100,000 blue collar workers displaced by automation and globalisation and try to secure new property, school, resort and sports field maintenance contracts.
Programmed is still expecting earnings of $100 million, before non-trading items, in the 2017 financial year as previously forecast.
Net debt was $240 million at 30 September 2016, similar to 31 March 2016, due to one‐off integration and restructuring expenses; and the final deferred payment of $9.5 million for the Broadsword business purchased by Skilled three years ago.
