PRG downgrades guidance
Programmed Maintenance Services Limited (PRG) downgraded its FY10 EBITA forecast from $63 million to a range of $57 million to $60 million citing lower than expected discretionary or expansionary works being committed by customers in painting operations across Australia, New Zealand and UK. In addition the company said the Maritime Union of Australia is pursuing a wage claim that is not “acceptable” to its business or any clients.
”We, along with other operators, have endured with the support of all our clients a number of industrial stoppages to date,” Programmed Maintenance said.
”Despite our best efforts, the dispute remains unresolved and more stoppages are likely in the coming weeks.”
The company said some clients have now decided to defer work planned to commence in January until the industrial dispute is resolved to mitigate the significant costs the industry is bearing as a result of this dispute.
“The rising legal costs of this dispute along with the revenue fall from the deferral of works is now forecast to cause a material fall in Marine earnings in the second half, with the full year Marine FY10 EBITA result now expected to be similar to the prior year, due to a stronger first half result,” Programmed Maintenance added.
The company expects full year revenue from its painting operations to be down an average 10% across all three countries, while the sub zero temperatures and snow conditions being experienced in the UK have resulted in additional difficulties for its UK operations during December and January.
Programmed Maintenance forecast FY10 NPAT to be in the range of $26m to $29m compared with a reported $28m last year.
At the close of trade Thursday, Programmed Maintenance shares were trading at $3.66.
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