Nomad Building Solutions has recorded a $10.7 million net loss after tax for the 2010 financial year, less than two weeks after forecasting an $8 million full-year loss.
Nomad Building Solutions has recorded a $10.7 million net loss after tax for the 2010 financial year, less than two weeks after forecasting an $8 million full-year loss.
The company said the new figure was based on further reassessment of major projects.
The result is 153 per cent lower than the company's $20.1 million profit for the previous corresponding period.
It came on revenue of $223.2 million, 46 per cent down on the company's revenue of $415.3 million for the 2009 financial year.
Nomad has booked impairment charges at June 30 of $50.6 million against goodwill and $2.3 million after tax against plant and equipment.
These writedowns have reduced the carrying value of goodwill to $31.4 million and plant and equipment to $3.7 million on Nomad's balance sheet.
In a statement Nomad said, "The operating losses of FY10 can be attributed to a number of identified management and operating deficiencies."
"Nomad continues to win contracts with the current order book in excess of $100 million and the outlook on tenders and other inquiries remains positive," the statement said.
See company statement below:
Nomad Building Solutions Limited and its subsidiary entities (Nomad) have reported a net loss after tax (NLAT), but before impairment charges, of $10.7 million for the year ended 30 June 2010 (FY10) on revenue of $223.2 million. This is greater than the NLAT of $8 million indicated in the market guidance on 17 August 2010 owing to further reassessments of major projects.
As indicated in the 17 August 2010 announcement, Nomad has booked impairment charges at 30 June 2010 of $50.6 million against goodwill and $2.3 million after tax against plant & equipment.
These writedowns have reduced the carrying value of goodwill to $31.4 million and plant & equipment to $3.7 million on Nomad's 30 June 2010 balance sheet.
After allowing for all impairment charges, the statutory NLAT for FY10 was $63.6 million, equating to a reported statutory loss per share of 46.1 cents.
Key Points
- In the past 12 months Nomad has experienced difficult operating conditions and has also experienced difficulty in the execution of some major contracts.
- Revenue decreased by 46% to $223m.
- The NLAT is clearly unacceptable.
- The recent appointment of a new Managing Director and changes in management are
expected to result in improvements to the performance of Nomad's businesses.
- No final dividend has been declared.
Commentary
Following the Global Financial Crisis and with tax uncertainty in the resources sector, Nomad has experienced a decline in revenue which together with the poor execution of its contracts has resulted in unacceptable margins.
Despite the headline losses, cash flow from operations remained positive and Nomad's net debt was reduced by $9 million over the course of the 12 months to 30 June 2010, from $27 million to $18 million.
Nomad's net debt to equity ratio at 30 June 2010 was 32.0%.
Following the losses and writedowns reflected in the FY10 result, Nomad's Net Assets per share was 40.7 cents at 30 June 2010. NTA per share was 18.0 cents.
Nomad's bank, Westpac, has been fully appraised of the Company's trading position and
continues to support the Group. Westpac is working with Nomad to execute documentation extending the Company's banking facilities to July 2011.
Nomad continues to win contracts with the current order book in excess of $100 million and the outlook on tenders and other inquiries remains positive. The Group is forecasting a return to profitability in the 2011 financial year.
The operating losses of FY10 can be attributed to a number of identified management and
operating deficiencies. Nomad has appointed a new Managing Director, Mr Michael Bourke, with effect from 19 July 2010 and has effected a number of critical management changes. It has also reassessed how it will participate in the types of contracts for which it incurred the majority of the losses and is actively implementing other performance improvement initiatives.
Nomad has a strong exposure to the unprecedented levels of committed and planned investment in the Western Australian and Queensland resources sectors and the associated economic benefits. The outlook for the sectors where Nomad operates in is very positive for the foreseeable future.
