The non-resources-related sectors of Australia's economy are picking up, says labour higher and maintenance group, Programmed Maintenance.
Programmed on Thursday reported an $18.7 million loss for the six months to September 30, compared to a profit of $9.8 million a year earlier.
The loss was largely driven by a previously announced $28 million goodwill writedown linked to a deterioration in the market for marine services in the offshore oil and gas sectors.
Although Programmed's resources division, which includes marine services, suffered a significant fall in revenue and earnings, the group's property and infrastructure division enjoyed strong growth.
Managing director Chris Sutherland says Programmed's first-half loss reflects the passing of the baton from the resources sector to the infrastructure and household services sectors of the economy.
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"We do really think that the non-resources part of the economy is actually improving," Mr Sutherland said on Thursday.
Programmed expects further improvement in its property, infrastructure and workforce businesses, which should offset the downturn in the resources business.
Blue-collar sectors like manufacturing are doing better now that the Australian dollar is lower.
"People have got more confident the dollar is going to stay at about that level, and they are looking to see how they can invest in their facilities as well as in their hiring of people," Mr Sutherland said.
"Clients in manufacturing, industrial, tourism and recreation are all looking to grow their businesses over the next 12 months, and we're looking to see how we can support them.
"That's something that we weren't seeing 12 months ago."
Programmed said its integration of Skilled Group, which it bought for $652 million in October, was ahead of schedule and expected to deliver more than $20 million in annualised cost synergies by the end of December 2015.
During the first half, Programmed's property and infrastructure division lifted earnings by 68 per cent to $18.7 million.
Earnings from the resources division, which services the offshore oil and gas and onshore mining sectors, fell 66 per cent to $3.9 million.
The drop reflected falling demand for vessel management, manning, catering and logistical services, which was partly due to completion of some major offshore construction projects.
Also, the significant fall in the oil price resulted in cancellation of some existing exploration work.
Excluding significant items, including the writedown and $5.2 million worth of costs from the Skilled Group acquisition, Programmed's underlying net profit rose to $12.8 million, from $12.1 million in the prior corresponding period.
Shares in Programmed closed 15.0 cents lower at $2.84.
PROGRAMMED LOSS REFLECTS ECONOMY
* First half revenue for 2015/16 down 1.0pc to $709.7m
* Net loss of $18.7m, down from profit of $9.8m
* Interim dividend of 6.5 cents, fully franked, unchanged
