Decmil predicts loss, looks to raise capital

Osborne Park-based Decmil Group has narrowed its earnings forecast for the full financial year while flagging a $9.7 million write-down of a contract.

Decmil has also entered a trading halt ahead of a proposed capital raising.

It expects to earn between $7.5 million and $8 million from continuing operations in fiscal 2021, compared with its previous $6-10 million forecast, announced on June 4.

“We were able to achieve this result despite COVID-related delays shifting the award of several significant contract awards and project commencements until FY22,” chief executive Dickie Dique said.

Decmil revealed the delays last month while lowering its revenue guidance for FY21, from $360 million to $300-320 million.

The company says it has taken a more conservative approach to its profit position due to previously announced problem contracts including a terminated agreement with New Zealand’s prison’s department, which led to the closure of Decmil’s NZ business in April last year.

That was followed by the resignation of chief executive Scott Criddle, who was replaced by Mr Dique in May.

Today, Decmil announced it would write down $9.7 million to the contract position for a “legacy legal dispute” but said this wouldn’t affect the company’s cash position, which stood at $30 million at the end of 2020.

Mr Dique said Decmil had preferred and contracted work in hand totalling more than $400 million for FY22, with revenue expected to be more than $500 million.

The company requested a trading halt on July 22, ahead of a capital raising expected to be announced on Monday.