VDM Group has confirmed a full year net loss of $35.5 million for the year ended June 30, driven by $39.2 million in writedowns and a slowdown in revenue.
VDM first forecast a loss of between $35 and $40 million for the 2010-11 financial year in June.
The writedowns included a $21.2 million impairment charge relating to VDM’s consulting division, a $14.4 million provision for restructuring costs, legacy contracts and disputes, and a $2.9 million charge arising from the sale of its Osborne Park property on Selby Street.
VDM said its revenue dropped from $521.3 million in financial year 2010 to $332 million in FY2011.
The company said it was optimistic that its restructuring and cost saving initiatives and improved industry conditions would underpin a profitable first half of financial year 2012.
As part of its restructuring and debt reduction programs, VDM sold its Hanwell Way, Bassendean, property for $4 million and has entered a contract to sell its Selby Street office in Osborne Park for $12 million.
VDM said it was also continuing to pursue its capital raising initiatives with the assistance of lead manager Patersons Securities.
The company is seeking to raise a minimum of $28 million, and up to $52 million through an entitlements offer to existing shareholders.
It willissue a supplementary prospectus for the capital raising shortly, and said revisions to its original plan include the issue of one free option for every two shares to shareholders who remain on the register as at November 17.
VDM chief executive Andrew Broad was bullish, saying the group had already secured more than $100 million in major construction contracts since May 1, predominantly in the resources and infrastructure sectors.
“The $100 million in major new contracts we have won since 1 May 2011 is a strong vote of confidence in VDM from our major blue chip clients,” Mr Broad said.
“It is also evidence that the industry wide hiatus in awarding new contracts is abating.
“We have a tender book in excess of $1 billion that are still pending adjudication and are confident this will underpin a robust pipeline of work in the future.
“VDM's future is not without its challenges, however we believe a successful capital raising, the restructuring initiatives, a healthy relationship with our lenders and a very positive industry outlook will underpin a return to profitability.”
