Delays lead to redundancies for Coffey

PROJECT delays and postponements have forced the hand of Coffey International, with the consulting group announcing the axing of 100 jobs to recover $A15 million in costs.
Delays lead to redundancies for Coffey Delays lead to redundancies for Coffey Delays lead to redundancies for Coffey Delays lead to redundancies for Coffey Delays lead to redundancies for Coffey

Coffey International managing director Roger Olds

Staff Reporter

The retrenchments will start immediately and should be finalised by February with the company to pay out $5.5 million in redundancies and office closure costs.

About $6.5 million is expected to be achieved in operating cost savings by the second half of the 2011 financial year.

It has also renegotiated an extension of its banking facilities for a further three-year period to February 2014, which is where the one-off cost of $5.5 million will be drawn from.

ILN sister publication MiningNews.net did contact Coffey to ascertain the amount owed under the banking facilities and to find out what offices would be closed, but was still awaiting a response at the time of deadline.

Confirming at Coffey’s annual general meeting that previous cost saving programs had met their targets, Coffey managing director Roger Olds said fee revenues continued to be affected by project delays and postponements, despite generally better conditions in the resources sector.

Major rainfall in the eastern states also impacted a number of construction projects.

Coffey now expects that operating earnings before interest, tax depreciation and amortisation (OEBITDA) for the six months to the end of this month will be in the range of $16 to $18 million before one-off charges.

This compares to OEBITDA of $31.1 million for the corresponding period last financial year, and an OEBITDA of $18.3 million for the first half of this year.

In terms of outlook, Coffey advised it was too early to provide guidance on future earnings for the full financial year, only to say that the cost savings would have an immediate impact on its performance.

“The quality of Coffey’s pipeline has increased over recent months, and several delayed projects are due to start in early January,” a company statement said.

“The company expects to provide a more detailed market update at its half-yearly results announcement in mid-February.”

Coffey's shareprice was down by 1c to $1.03 in morning trade

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