Downer shares dip after flagging flat revenue forecast
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What they said: Downer EDI shares lowered in morning trade on the ASX after the engineering and services group provided a mixed trading update at its annual general meeting this morning.
Downer shares fell 2.1% to $5.68 by 11:30am AEDT, having advanced around 30% since the turn of the year.
Downer notches 'steady start' to FY25 despite mixed trading
The news: Engineering and services group Downer EDI said it is still targeting an improvement to last year's performance in FY25 despite "mixed trading conditions".
The numbers: In prepared remarks ahead of today's annual general meeting, Downer chief executive Peter Tompkins said the company made a "steady start" in the first four months of the new financial year, including securing three contracts valued at around $230 million since August.
The company is still targeting an improvement on its FY24 performance and aims to deliver its remaining $45 million cost-cutting commitment, he said.
The context: Tompkins warned that government spending in Victoria is expected to stay subdued throughout the first half of FY25, while the company does "not currently see signs of improvement".
Activity levels in New Zealand are also being impacted by softer economic conditions, Tompkins said, especially in the power, water and telco segments. However, this impact is mostly offset by ongoing reductions in the company's cost base and improved productivity in its Australian business, he noted.
Downer expects revenue to be relatively flat compared to the prior year, but is targeting continued improvement in earnings quality and EBITA margin.
The source: ASX announcement
