SCEE shares hit by loss warning

Southern Cross Electrical Engineering shares lost nearly a quarter of their value today after the company warned of a $2 million loss for the six months to December.

But it still expects to remain profitable for the 2017 financial year, with a net profit of between $4 million and $5 million forecast.

SCEE said this morning that, due to slower than expected ramp-up of work in the first half of the financial year, it expected to report an H1 underlying net loss of $2 million.

The poor result has been attributed to a slower-than-expected receipt of contracts, a delay in the mobilisation of its oil and gas projects, and a temporary slowdown of work in the roll-out of the national broadband network in Western Australia through its recently acquired Datatel business.

SCEE shares lost 23 per cent to 45 cents each at the close of trade.

“This is a period of transition for SCEE as it implements its strategy to evolve into a sustainable business in its historic resources markets and deliver growth through expansion into new geographies and adjacent and complementary sectors,” SCEE chief executive Graeme Dunn said.

“We are positive that in all these sectors where we have experienced a slowdown or a delay to the commencement of work that activity levels will return to expectations.

“The company maintains a strong balance sheet, remains highly focussed on cost control and management is very active in investigating a number of potential acquisition opportunities in line with our strategy.”

SCEE made a net profit of $5.1 million for the 2016 financial year.