No dividend in sight for struggling Transfield
Transfield Services has warned of continued tough trading conditions as it works to cut debt amid continuing weak revenue generation.
As a result, the group gave no indication on Friday when dividend payments would be resumed to its dwindling investor base, with shareholder numbers having halved over the past five years as its share price and earnings have slumped.
"The focus is the preservation of capital," outgoing chairman Tony Shepherd told shareholders at the annual meeting, "capital preservation and to be ready for when the economy turns."
Mr Shepherd, the president of the Business Council of Australia, was appointed this week to head the federal government's commission of audit into the nation's finances. "Business conditions are some of the most challenging we have experienced," he said. As a result, there is a freeze on dividends and a salary freeze while capital spending is being limited where possible.
"It is necessary to get our cost base onto a sustainable footing," managing director Graeme Hunt told the meeting.
Some finance and human resources functions have been outsourced while others such as procurement and fleet management have been centralised.
Transfield this week sold its share of a venture in New Zealand with WorsleyParsons for $30 million, as well as selling its share of a venture in Qatar, Transfield Mannai, for an undisclosed amount.
The company said it left its year to June net profit forecast unchanged at $65 million to $70 million, based on no further deterioration in revenue or of the macro business environment.