Lycopodium has cut down their interim dividend, after posting a disappointing half yearly report with a 51.2 per cent drop in profit.
With a first-half profit of $6.3 million, down from $12.8 million reported in the previous first-half FY report, the engineering and project management firm’s slump was attributed to the mining sector slowdown.
Dividends will be paid out at 5 cents a share, down from 15 cents the previous corresponding period, and down from 21 cents for the final dividend of FY 2013.
Revenue from ordinary activities suffered a 22.4 per cent fall to $95,843,321 million.
The directors of Lycopodium have forecast full year revenue in FY 2014 at $140 million with an after tax profit of $9.5 million, reflecting continued deterioration in the minerals industry business segment as pressure on margins and project award delays have reduced the profitforecast.
Lycopodium have attributed their performance to lower demand for services, caused by lower commodity process, reduced spending and cutbacks by major miners, the difficulty for junior miners to raise equity, the ongoing decline of the manufacturing sector in Australia, and increasing competition.
Lycopodium managing director Rod Leonard said the market situation may not improve for some time.
“The difficult question for us to answer is how long the industry will be at these low levels of activity,” Leonard said.
“There has been a minor increase in the level of tendering for studies and projects since commencing the new calendar year, which is an improvement over the prior half… However our collective view is that our sector will remain subdued through the next 12 -18 months.
“Lycopodium is adopting austerity measures in line with this potential timeline, but note that success on any of a number of tenders could quickly alter our view."
Lycopodium has said it is unable to provide any further details in relation to the potential acquisition of a majority interest in South African based engineering group ADP Holdings.