The new leadership at Monadelphous Group has outlined a targeted approach to new work while acknowledging delays in contract awards will lead to a fall in first-half revenue.
The new leadership at Monadelphous Group has outlined a targeted approach to new work while acknowledging delays in contract awards will lead to a fall in first-half revenue.
Speaking at today’s annual meeting, new managing director Zoran Bebic said the group anticipated a 10 to 15 per cent fall in first-half revenue.
“We currently have over $2 billion of new project work in the tendering phase, however we are seeing some delays in the timing of awards and commencement,” he said.
“Consequently we are anticipating engineering construction revenue to decrease this year before ramping up in the 2024 financial year.”
Mr Bebic said full-year revenue in FY23 was dependent on the award and commencement of new contracts.
The engineering contractor said the shortage of skilled labour was the most significant challenge for the business, along with heightened supply chain risks and escalating costs.
“With capacity constrained, we are taking a strategic and targeted approach to new work, engaging and collaborating earlier with customers and increasing focus on earnings quality.”
Today’s AGM also marked the formal retirement of long-serving executive chairman John Rubino, who was unable to attend due to ill health.
He has been succeeded by former managing director Rob Velletri, who said the change was in line with the company’s long-term succession plan but had occurred faster than had been anticipated.
Mr Velletri said he would take his cues from the example set by Mr Rubino.
“I would see my role as very much aa support role for Zoran, he is the chief executive, he runs the business, so it will be more of a mentoring role.
Mr Velletri added he would have a “pretty high” time commitment over the next six to 12 months as the leadership transition was bedded down.
He added there would be less draw on his time as he would not be required to respond to issues on a daily basis.
“But it will be an executive role and I will be available in the business full time.”
Mr Bebic has been with Monadelphous nearly 30 years and has worked directly with Velletri for about 20 years so he anticipated the transition would not be complex.
The company also disclosed today the remuneration packages for its new leaders.
Mr Velletri’s base salary will be $650,000 per year, down from $1 million last financial year, while Mr Bebic will be on a base salary of $875,000, up from $716,000.
Lead independent director Sue Murphy said the company aimed to pay salaries around the median level for the market.
The company’s share price closed 2.2 per cent lower at $13.50 after dipping as low as $13.00 during the day.
