Programmed Maintenance Services expects the scale it gains through its takeover of Skilled Group will outweigh the impact of declining mining investment.
Programmed, which recruits workers for employers and provides maintenance across a range of industries, says its performance in the first three months of its 2015/16 fiscal year reflects the major transition occurring in the economy.
Programmed’s property and infrastructure divisions are generating strong growth in revenue and earnings, but the resources division is generating lower revenue and earnings following a downturn in the resources sector.
The workforce division’s trading remained similar to the second half of fiscal 2014/15.
Chairman Bruce Brook told shareholders at the company’s annual general meeting that significant changes were occurring across the Australian economy.
“The country is having to adjust to lower prices for our natural resources, a lowering of the significant mining capital expenditure of the past few years and a reduction in the global competitiveness of our manufacturing sector,” Mr Brook said.
But he said Programmed could manage downturns in one sector by focusing on opportunities in other sectors where growth is occurring.
Managing director Chris Sutherland said the combination of Programmed and Skilled would give the business significantly increased scale, greater brand recognition and diversification across all sectors of the economy.
“We will be better positioned to compete for larger outsourcing opportunities that are emerging in the marketplace,” Mr Sutherland said.
Those opportunities in maintenance were in the industrial, mining and property sectors.
The bigger opportunities in staffing included the nursing, healthcare and education sectors.
Programmed is also making significant investments in technology, which would enable greater online servicing, greater support for customers and further consolidation of back-office functions.
Programmed said its proposed $652 million acquisition of Skilled Group – on which Skilled shareholders will vote in October – would unlock substantial value for both companies’ shareholders.
The acquisition is expected to add materially to earnings per share.
Mr Sutherland was confident that Skilled shareholders would endorse the takeover.
Programmed shares were three cents lower at $2.42 at 1530 AEST.