Caravan and accommodation manufacturer Fleetwood Corporation’s profit fell 7 per cent to $3.8 million for the six months to December, following reduced demand for the company’s services in the resources sector.
Caravan and accommodation manufacturer Fleetwood Corporation’s profit fell 7 per cent to $3.8 million for the six months to December, following reduced demand for the company’s services in the resources sector.
Fleetwood posted an 18 per cent slide in half-year revenue and declared no interim dividend for the period.
But the company said strong earnings from the education sector and affordable housing offset the result.
“Moderate demand for accommodation in Karratha resulted in Searipple Village having an average occupancy of 35 per cent during the first half,” Fleetwood said in a statement.
The company announced yesterday that it had entered into a three-year agreement with Rio Tinto for accommodation services at Searipple Village.
“The agreement gives Rio Tinto access to 804 rooms and nominates Searipple as the preferred accommodation facility for (the mining giant’s) fly-in, fly-out workers in Karratha,” Fleetwood said.
“Searipple comprises 1,326 rooms and therefore has capacity to service other customers in the Karratha market.”
The company also said increased competition from a number of small Australian-based caravan manufacturers had affected sales, as did overseas component parts suppliers.
“Sales of fibreglass canopies for light commercial vehicles remained subdued during the period,” Fleetwood said.
The company said it was restructuring operations in the recreational vehicles division to lower costs and improve competitiveness in the market.
Looking ahead, the company said demand from the education sector remained strong and second-half earnings were expected to be underpinned by classroom builds and the relocation of existing classrooms to accommodate shifting student numbers.
“Revenue from affordable housing is expected to increase in the second half, and discussions continue with major operators in this market,” Fleetwood said.
Fleetwood is currently in discussions with the state government over formal agreements to govern a 15-year operating term for its Osprey Village in South Hedland.
In November last year, Business News reported that the state government had committed to pay $7.3 million per year in fees to Fleetwood's Osprey Village, irrespective of occupancy levels.
“Should the parties not be able to satisfactorily agree terms for a formal agreement, Fleetwood would be entitled to receive a capital payout from the government,” the company said.
“In this event, Fleetwood’s group debt would significantly reduce.’’
Fleetwood shares closed 4.3 per cent lower at $1.32 per share.
