Slump in contracts puts more Bradken jobs at risk
Mining services company Bradken has warned of further redundancies as it grapples with a drying up of contracts as the resources boom declines.
The company faced shareholders for the first time on Tuesday since being dealt another blow in the form of a Federal Court decision that found in April that the company and its top bosses, including former NSW premier and chairman Nick Greiner, had engaged in bid rigging.
Bradken is appealing.
Speaking at the annual meeting, chief executive Brian Hodges said he was forecasting similar revenues this year to last, but expected the first half to be marked by a "dramatic" drop off in orders from mining companies as commodity prices fell. "It started in October for us and has been quite strong and dramatic," he said.
"We stress the first half of 2014 will be quite challenging."
But the company said it expected conditions to improve in the second half.
"If recent improvements in order intake continue, we still expect the year to be broadly comparable with 2013."
Mr Hodges said the company was confident about its appeal to the Federal Court, which found Bradken, Mr Greiner and he himself had engaged in cartel activity in its acquisition of mining parts company Norcast. The court ordered the company to pay $22 million in damages to Norcast's owner, Swiss group Pala.
"Our advice is there is very strong grounds for appeal around both the cartel and bid-rigging claims," Mr Hodges said.
The Australian Shareholders Association advised shareholders on Tuesday to reject the company's remuneration report on the basis that Mr Hodges was paid "considerably higher than other direct reports".
It also rejected the granting of restricted share rights, worth $715,000 over three years, to Mr Hodges, saying it was critical of some of the conditions of the award given Mr Hodges' already high salary.
ASA chairman Ian Curry said the Federal Court decision had raised corporate governance issues that it would be "looking to Bradken to address".