I think you need more context regarding the administration...

I think you need more context regarding the administration costs. They moved from karrara to western turner, at Karrara they did all the admin, Western Turner has a large contingent of administrators from the likes of NYFL. The manage a large portion of the hire agreements, flights and admin for this project. Also, the land development is ending which means lower admin vs revenue costs. To me, this means administration hasn't really fallen as a percentage of revenue.

Moving on, how does this compare with the competition? Poorly. I was speaking with my accountant who indicated several of his clients operate in oil and gas where contractors were expected to reduce contract prices by about 50% to maintain the order book. Further to this, I was reading an engineers australia report that indicated senior management wages have fallen from an average of circa $450k to $225k (might be WA specific, can't remember). Similar falls in contract prices have occurred in iron ore. Again, looking towards direct competitors, we can see the changes that have occurred at macmahons. They have sold the fancy offices and moved near the airport. Expensive management were given the flick for cheaper and more frugile management.

It is my opinion that the fall brierty are capable of is about 25-50%. This would occur through right sizing, pay cuts and relocating offices/storage to cheaper leases. The effort by management to date is embarrassing.

Blaming contract disputes for missing profit is shameful ignorance of the truth. Independent of the claims validity, if they were pushing wages down at the management level as quickly as their competition, they would be at their target profit margin with potential upside to $15mil of profit.

Instead, all they've done is make superficial attempts to reduce costs. Probably flicking of good surveyors and project managers who were contractors for direct employees (you get what you pay for in that respect and I'd expect those "cost savings" to rebound). The fact is that if Brierty management don't take an axe to their own wages and the excessive level of un-needed minions they have then they will get the axe. Unfortunately, I think that if we don't make it known how we feel regarding this issue through letters and voting against their above market pay then us shareholders may be the ones that bare the true grunt of their mistakes. As is already evidenced, we lost 5% of our investment by their inability to drop prices in line with their competition. This will only accelerate without action and shareholders have a responsibility to advocate their concerns on the issue.

Again, I'll be voting against the remuneration.


p.s. I once managed a very similar company and the "cannot be compared to other companies in the sector" excuse is nonsense. If anything, because the jobs are small the management is simpler so you can have flatter management structures. you just need engineers, managers and supervisors that are all rounders and willing to do the dog work. I've seen overheads excluding workshop but including on-site admin as low as 2-4 people per $50million of revenue excluding workshop for projects $1-20million in size. Assuming the same numbers and a rather high wage average of $350k/person all in that's about 5-8million a year.