Programmed posts $98m loss, but revenue up

Programmed Maintenance Services has returned an annual net loss as a result of lower demand for marine services following the steep drop in oil and gas prices.

Perth-based Programmed, which provides staffing maintenance and facility management services, reported a net loss of $98 million for the year ended March 31 from a net profit of $25.7 million a year earlier.

However revenue jumped 54.6 per cent to $2.22 billion, thanks largely to its acquisition of Skilled Group in October last year.

Earnings before interest, tax, depreciation and amortisation grew 31.3 per cent to $80.6 million, while net debt was reduced to $239 million (below the group’s previous guidance of between $260 million and $290 million).

Programmed also declared a final dividend of 5 cents per share, fully franked, to bring the full-year dividend payout to 11.5 cents per share.

Managing director Christopher Sutherland said it had been a transitional year for Programmed as the company wrapped up its acquisition of Skilled and incurred one-off costs to integrate the business, while managing the significant downturn in the oil and gas sector.

“We have a clear vision to be a leading provider of staffing, maintenance and facility management services, without injury,” he said.

“Our business model, providing services to thousands of customers across all industry sectors throughout Australia and New Zealand, gives Programmed considerable strength in an economy that continues to present new challenges.

“Customers in markets such as retailing, tourism, transport and manufacturing are hiring people and spending on their assets again, and there are growing opportunities in the education, health and aged care sectors.”

Mr Sutherland said demand for labour in the resources sector had weakened due to the completion of major projects, cutbacks in mining companies’ exploration and operating budgets, and a sharp drop in the services for the oil and gas industry.

But he said the acquisition of Skilled had increased the group’s scale and diversification, and had opened up new opportunities.

“It will take a number of years for the benefits of our increased size, scale and efficiency to be fully realised as we integrate business systems and seek growth across our expanded network,” Mr Sutherland said.

“We have a large, scalable platform that will allow us to continue to invest in technology and lower our unit operating costs for many years to come, creating a more competitive service provider and enabling us to provide more benefits for customers.”

Programmed shares were 8.5 per cent higher to $1.59 each at 10am.