No dividend in sight for struggling Transfield
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.
Frequently Asked Questions about this Article…
Transfield Services is not paying dividends because the company is facing tough trading conditions and is focused on preserving capital. The company aims to be ready for when the economy improves, and as such, has implemented a freeze on dividends.
To manage its financial challenges, Transfield Services is cutting debt, freezing salaries, limiting capital spending, and outsourcing some finance and human resources functions. Additionally, they have centralized procurement and fleet management to reduce costs.
Yes, Transfield Services recently sold its share of a venture in New Zealand with WorsleyParsons for $30 million and its share of a venture in Qatar, Transfield Mannai, for an undisclosed amount.
Transfield Services has left its net profit forecast for the year ending in June unchanged at $65 million to $70 million, assuming no further deterioration in revenue or the macro business environment.
Transfield Services' shareholder numbers have halved over the past five years as the company's share price and earnings have slumped.
The focus of Transfield Services' current strategy is on capital preservation and getting their cost base onto a sustainable footing to be prepared for when the economy turns.
The outgoing chairman of Transfield Services is Tony Shepherd, who is also the president of the Business Council of Australia.
Transfield Services is experiencing some of the most challenging business conditions and is taking measures to preserve capital and manage costs. The company is preparing for an economic upturn while maintaining its profit forecast, provided there is no further revenue decline.
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