LONDON: Cleaning and catering business Spotless has reaffirmed its expectation that full year profit will fall 10 per cent. The company has reaffirmed its forecasts for revenue to exceed that of fiscal 2015, however costs associated with new contracts and acquisitions will weigh on profit.
Net profit is expected to be 10 per cent lower than the $60.2 million profit made in fiscal 2015. However, the company says the challenges associated with integrating the acquisitions are short term.
Spotless reported a 20 per cent fall in profit to $48.1 million in the six months to December 31, despite a nearly 20 per cent increase in revenue to $1.6 billion. The profit decline, flagged in December, was due to delays in contracts and a choppy integration of acquisitions, the company says.
During the half, Spotless says it was awarded a number of new and renewed contracts, valued at more than $400 million in annual revenues.
This includes facilities management and integrated services contracts for BHP Billiton, the NSW land and Housing Corporation, SA Health and GlaxoSmithKline and food and catering contracts for National Australia Bank, BHP Billiton, Telstra and Virgin Brisbane Domestic Terminal. Spotless will pay an interim dividend of 3.5 cents a share, down from 4.5 cents a year ago. At 1153 AEDT, its shares were up by 10.25 cents, or 9.2 per cent, to $1.22.
