SCEE targets reductions as profit shrinks

Perth-based contractor Southern Cross Electrical Engineering has reported a 34 per cent slide in profit to $4.1 million for the six months to December, with the company facing challenging and competitive conditions in the sector.

SCEE reported a 28 per cent drop in revenue to $142 million, while overheads were reduced by 8 per cent.

“Management remains focussed on ensuring that overheads are at an appropriate level to effectively support activity and anticipates that further cost reductions will be achieved,” SCEE said in a statement.

The company recorded cash on hand at $34 million with $1.8 million in outstanding debt.

Managing director Simon High said the company was operating at historically high activity levels in the first half of the financial year.

“However, market conditions throughout the period have been extremely challenging with margins remaining under pressure,” he said.

“As the pool of large-scale projects has decreased the tender process to secure available work has become increasingly competitive with price the key driver for clients.

“In order to counter this, efficiency measures aimed at reducing overheads have been in place for 18 months now and we have achieved a significant decrease with overheads in the second quarter 22 per cent lower than the first.

“This remains a key focus area for management and we are targeting further reductions through ongoing review and restructuring,” he said.

As previously announced, Mr High will be stepping down from his role when a successor has been found.