Indeed something stinks. Where is the ASX "please explain"? Is this simply a large holder exiting at any cost?
From the recent October 23 Business Update:
The run-rate in activity levels across the Group during the second half of FY14 (the year to 30
June 2014) continued in the first quarter of FY15 (the three months to 30 September 2014).
Overall, revenue and earnings in 1Q15 were more than 10% higher than the pcp.
Demonstrating the results of SKILLED's strategy to invest in higher skill, higher margin
segments, Engineering & Marine Services (which contributed 53% of SKILLED's earnings
before interest, tax, depreciation and amortisation (EBITDA) in FY14) continued to grow in
1Q15. The Thomas & Coffey integration is progressing well, and an attractive return is being
generated from the recent investment in additional Broadsword vessels.
Technical Professionals (which contributed 15% of SKILLED's EBITDA in FY14) has
experienced stable contractor numbers in the Swan business and improved performance in
other segments, including permanent placements, telecommunications, Health and Training
Services.
Workforce Services (which contributed 32% of SKILLED's EBITDA in FY14) has continued to
experience difficult market conditions. Activity levels relative to the pcp are variable across
sectors and geographies, and margin pressure has continued.
SKILLED continues to progress simplifying, standardising, automating and centralising
processes across the Group. In addition, the Group has accelerated its Transformation
program, with at least $15 million of savings anticipated to be achieved in FY15 through process
improvement and the benefit from systems investment.
SKILLED's cashflow generation and balance sheet position remain strong. Net debt is expected
to peak in mid FY15 as a result of seasonal factors and support of the Saipem project, before
declining by the end of the financial year.
So we have Workforce Services (32% of EBITDA) lagging, versus Engineering & Marine Services (53% of EBITDA) growing. I really can't see a problem here, not one that can cause the share price to basically halve in only one month, so I've been buying again today. I'm expecting a decrease in the dividend, but even with that SKE seem to be highly undervalued. But of course we plebs may be the last to find out about material changes. If there are any material changes to the above report then SKE need to update the market. No, actually, I think SKE need to update the market even if there are no material changes, if only to restore confidence in the company's financial performance.
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