As expected Melbourne-based Programmed Maintenance Services has reported a first-half loss but says earnings will improve in the second half.
The full interim results for the six months to September were released yesterday, two weeks after a surprise downgrade saw the shares sold down heavily in the course of a day, then rise. They touched a 52 week low of $1.03, closed that day (November 10) at $1.38, 4c higher than the opening.
The net loss was $3.07 million, against a $12.1 million profit in the six months to September, 2009.
But in the past two weeks the shares have drifted lower, and although yesterday’s result was largely known, they fell more than 3% or 4.5c to $1.24 at the close.
In the November 10 update, Programmed said that "Subject to audit review, Programmed’s EBITA (earnings before interest, tax and amortisation), for the six months to 30 September 2010 is expected to be $15 – $16 million before restructuring costs (refer to Table 1), compared with reported $27.3 million in 1H 10. "
Yesterday the company reported EBITA of $16.2 million, but that slight improvement didn’t convince the market.
Revenue was up 4.3% on the previous corresponding period to $611.4 million.
And, as promised on November 10, Programmed declared a fully franked interim dividend of three cents, in line with the prior corresponding period.
Programmed said its property and infrastructure division suffered from reduced demand from retail and commercial customers due to the economic downturn, while the resources and industrial division was affected by an industrial dispute earlier this year and delays to projects.
"The property and infrastructure division has now been restructured and, following the earlier restructuring of the resources and industrial and workforce divisions, all our operations have a lower cost base and are trading more efficiently," managing director Chris Sutherland said in yesterday’s statement.
The company said its workforce division, which provides staffing, posted 33% earnings growth in the first half, and further improvement is forecast.
"Our Workforce division’s performance has shown solid improvement and this is expected to continue, while our Resources & Industrial division is forecasting significant increases in revenue and earnings in 2H11 and FY12," yesterday’s statement said.
"With the Property and Infrastructure division now operating with a lower cost base, we are confident of a stronger result in the second half, with EBITA of approximately $30 million, similar to 2H10.
"This would lead to EBITA of approximately $46 million before restructuring costs for the full year."
That’s unchanged from the forecast made earlier this month.
