Date: August 09 2012
AFTER the $100 million losses of the past few years, shareholders in Coffey International will have to wait a little longer before dividends are resumed, as the company's focus sticks to cutting debt.
In the year to June 30, the professional services consultancy posted a net loss of $34.2 million, about half the $69.8 million of a year earlier. Revenue was little changed at $667.6 million for the year.
After an onerous $40 million share issue last November, the gearing ratio remains high, about 50 per cent, which will limit a quick resumption of dividends to former levels. Debt surged after a string of acquisitions that, with a heavy round of write-offs on its restructuring and asset sales, pushed the group into the red. Write-offs totalled $37.4 million in the year to June, following write-offs of $52.7 million a year earlier. As a result, the loss per share was 17.5¢, down from 46.5¢.
In April, the company slashed to $39 million to $41 million its forecast for earnings before interest, taxation, depreciation and amortisation from $45 million forecast earlier. The final figure for the year was $40.7 million.
After the restructuring, the focus now is to lift revenues and return to profit, managing director John Douglas said.
''There is margin upside in geosciences,'' he said, which is the group's dominant division, where margins are only about 10 per cent.
The company has had some success in reducing staff turnover, with further gains expected, which will help lift earnings as well, he said.
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