PRG always said that it would take until Mar 2017 to complete restructuring of the skilled businesses, so they seem to be pretty much on target with what they said.
I don't think there is much point in comparing profit vs revenue from a couple of years ago with profit vs revenue now. The macro environment is completely different and part of what any company will do is reduce margins severely to retain/win customers. I ran a services business for 30 years including the early 90s recession and my margins halved during bad periods. You retain your good people, cover your fixed margins and wait for the good times to come back. One of the best run businesses in the mining services area is Monadelphous and their margins have taken a hammering over the last 3 years.
Debt is reducing and should continue to reduce which is good as debt makes a company vulnerable in downturns. That means the dividend reduces which is prudent.
the marine stuff is a bit strange but if the company is pivoting away from that sort of business and reducing exposure via a JV I suppose there is some sense. It also gives them cash for debt reduction.
Programmed was quite bullish about growth from this point on and that seems to have disappeared - if staffing requirements are subdued and they have to keep their margins down to win business then the next 12 months could be similar to the last with higher NPAT due to reduction in interest and restructuring costs.
So definitely not a high growth business, but the dividend is good enough for me to sit quietly and wait for general economic conditions to improve.
PRG Price at posting:
$1.75 Sentiment: Hold Disclosure: Held
