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CEO Dean Banks says Ventia Services on track to meet profit targets

Ventia said profit margins should be “relatively flat” in the remainder of calendar 2022. The company’s stock, which was floating at $1.70 per share, fell 3¢ on Thursday afternoon at $2.75.

Profits rose in the group’s defense and telecommunications services businesses, which include contracts with the NBN, but fell in Ventia’s infrastructure and transport services divisions.

Defense and telecommunications services contribute the bulk of Ventia’s revenue, with defense generating $66.4 million in earnings before interest, taxes, and amortization (EBITA) and telecommunications around $68 million.

Ventia’s expenses were lower than a year earlier, when the company incurred costs to become a publicly traded company.

Depreciation expense was also down from the previous year, when the company wrote off the Visionstream and Easternwell brands (which were rebranded as Ventia).

Analysts said Ventia generated respectable profits, but noted the group’s payroll costs were rising.

Labor costs rose 5% year-on-year to $921 million, while contractor costs jumped 13.5% to $1.13 billion .

Total reserves, which include claims reserves, decreased 7% to $233.6 million.

Ventia’s working capital, which has been a concern for some analysts, remains negative with payables exceeding receivables, but the company’s net debt fell from $53.1 million to $509.9 million of dollars.

The group had $634.2 million in liquidity at the end of June, including a cash balance of $234.2 million and undrawn credit facilities of $400 million.

Company accounts show Ventia received $9.6 million in payments from its majority owners, construction group CIMIC and private equity group Apollo Global Management, up from $8.7 million a year earlier. .

CIMIC and Apollo, which each own 32.8% of the shares, can sell their shares when an escrow period ends in February 2023.

The company will pay an interim dividend of 7.47¢ per share. Ventia’s prospectus projected that it would generate $171.8 million in net profit after tax and amortization in calendar year 2022.