21/06/2016 - 10:19

Brierty expects $12m loss

21/06/2016 - 10:19

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Troubled civil and construction contractor Brierty’s forecast net loss has doubled to $12 million, with the company also revealing the cost on a project with Main Roads Western Australia has now blown out to about $22 million.

Troubled civil and construction contractor Brierty’s forecast net loss has doubled to $12 million, with the company also revealing the cost on a project with Main Roads Western Australia has now blown out to about $22 million.

Perth-based Brierty expects an underlying after tax loss of between $10 million and $12 million for FY16, revised from its previous forecast of $6 million.

The loss is the result of cost overruns on the company’s contract to upgrade parts of the North West Coastal Highway for Main Roads, which was originally valued at $69 million.

Earlier estimates put the blow-out at about $15 million; however Brierty now anticipates a pre-tax loss of about $22 million on the project.

“Following the recent management changes, the NWCH project was matching the revised work plan,” Brierty managing director Peter McBain said.

“Although progress has been impacted by an unseasonal major rainfall event, we now expect to complete the project in September.

“The major rainfall event is the subject of a costs recovery insurance claim.”

Brierty’s previously forecast $20 million in impairments for FY16 has also increased, with the company now expecting to record $25 million.

About $2 million was already reported in Brierty’s first-half results.

The impairments are non-cash and won’t affect the company’s operations or cash flow.

Brierty has continued to perform well at the majority of its projects, including excellent progress on the $300 million mining contract at Western Turner Syncline and land development project at Mitchell Creek Green, which are generating operation cash flow and profits,” Mr McBain said.

“Importantly, over the past few months Brierty’s expenditure review committee has identified and implemented cost efficiencies to deliver meaningful structural change across the business which ensure Brierty is in a stronger position to compete in the current market.”

The cost efficiencies implemented included 14 personnel redundancies and board member salary cuts.

Brierty shares tumbled 18.5 per cent to 11 cents each at 10:15am.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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