By Phil Boeyen, ShareChat Business News Editor
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Friday 17th August 2001 |
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Earnings before interest, tax, depreciation and amortisation for the period was A$200,000 on revenue of A$32.3 million compared with revenue of A$30.8 million for the previous six months.
Deputy chairman and CEO, James Boult, says the company's trading performance in the period had been below expectation but revenue in July was in line with budget and the company expects to report second-half profitability.
"As reported last month when we released the details of 'Project One', operationally we are now trading profitably, but we had to absorb substantial initial costs in implementing the new RMG structure which will enable us to improve customer service and boost future profitability."
Mr Boult says the company has carried first-half costs of A$1.8 million for personnel related to restructuring, A$4.6 million for property and office closures, and asset writedowns worth A$2.5 million.
"The principal item in the investment adjustment (A$1.6m) is the oil and gas assets which are the only remaining Frontier Petroleum assets still held.
"RMG is currently negotiating the sale of these assets. Various proposals are before RMG but the company will only conclude a transaction when it is satisfied that the sale will achieve market value."
The Project One restructuring announced in July is expected to lower costs by at least A$10 million a year.
"The hard decisions have been taken and implemented and we will now start to enjoy the economies of scale RMG expected," says Mr Boult.
"While there is more fine-tuning of our operating structure to be done which will result in further savings down the track there are no more significant restructuring costs to come.
Mr Boult says the company's successful capital raising of A$8.8 million in June has helped to reduce debt and given a much stronger balance sheet.
"RMG has had a hard look at its business and its asset values. The structure is now right and the revenue stream is strong. We are well positioned on a go forward basis to enter a period of growth and business building."
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