By Phil Boeyen, ShareChat Business News Editor
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Wednesday 1st May 2002 |
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The company offered a trading update to the market late on Wednesday after watching its share price slide in recent days, saying it now expects revenue for the full year to be around A$49-$50 million.
With first half revenue at A$29.74 million, the full year estimate puts second half earnings at around $20 million.
Operating profit also appears be on a downward trend in the second half.
In the six months ended December 2001 the company reported positive earnings before interest, tax, depreciation and amortisation of A$5.5 million, including a profit on the sale of its oil and gas assets of A$3.4 million.
However it is now picking that the final full year Ebitda will only be between A$500,000 and A$1 million.
RMG executive chairman, James Boult, says that while the company's medium term outlook is positive, various factors have affected the current year's likely result.
"Based on revenue achieved in the November 2001 to February 2002 period the board believed the company's results were improving and that fourth quarter trading would be Ebitda positive. This result would provide a firm indicator of RMG's outlook for the 2003 financial year and beyond.
"From a review of March trading results (in the latter part of April) it has become apparent that a number of the operational and management system issues remained and that these have had the effect of downgrading the recent results upon which the board and management has relied."
Mr Boult says the board decided to clarify its position given the weakness in the company's share price and to clarify the board's and management's own position with respect to their own understanding of the company's trading until very recently.
"When directors became aware of the current position they resolved to immediately inform the market."
Mr Boult says the company has appointed former RMG boss Paul Cooney as deputy chairman and chief operating officer and has also resolved to ensure shareholders have a clear understanding of the outlook for the 2003 financial year.
"In this respect there are some significant positives for the future. There is clear evidence that the effort put in to restructuring RMG over the past year, is now beginning to show benefit with increased revenue levels apparent in the outlook for May and June and continuing into the 2003 year."
Mr Boult says the company's New Zealand and Malaysian subsidiaries continue to operate profitably and that the short-term operational difficulties relate only to RMG's Australian collection business.
He says the board has been assured of ongoing support from the company's major shareholders, Cullen Capital Ltd and Paul Cooney, both of whom "share a positive view of the future."
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