Labour hire and services provider Programmed has its sights on Australia’s expanding service sector for growth but the company still sees potential demand for workers in the mining sector.
Programmed, which provides staffing, maintenance and facility management services, said the acquisition of labour hire outfit Skilled helped it lift net profit to $3.7 million for the first six months of 2016/17.
That compares to a net loss of $18.7 million in the first half of 2015/16.
Managing director Chris Sutherland said revenue had soared 88 per cent to $1.3 billion due to the Skilled acquisition, which was finalised in October, 2015.
Mr Sutherland said conditions remained tough for blue-collar workers in Australia’s industrial heartlands as companies move to become more efficient in the face of globalisation and automation.
Despite weaker demand for blue-collar workers in the mining states of Western Australian, Queensland and the Northern Territory, Programmed remains optimistic about the mining sector.
Mr Sutherland said his iron ore and coal customers were doing well due to the recent uptick in international commodity prices.
He also pointed to potential maintenance and worker provision opportunities with “green shoots” companies in smaller mining sectors such as gold and lithium.
“I think what’s also important to understand is that sometimes it’s more about individual businesses and circumstances in the economy than the overall economy,” Mr Sutherland said.
“We are trying to be part of a number of businesses that may be struggling in a sector but maybe they could look at outsourcing for the first time and we could actually help them become more efficient.”
Away from mining, Programmed is eyeing huge sales and contract opportunities in the household services sector, including education and health.
“There is employment growth in those markets,” Mr Sutherland said.
“We drive our energy and our sales and our organisation to where we think the economy is growing.”
Programmed plans to target outsourced public sector administration contracts, government programs such as the National Disability Insurance Scheme, defence projects such as submarine building in South Australia and public-private infrastructure projects.
The company says it wants to retrain 100,000 blue collar workers displaced by automation and globalisation and win new property, school, resort and sports field maintenance contracts.
Programmed said it still expects earnings of $100 million, before non-trading items, in the 2017 financial year, as previously reported.
The company will pay interim dividend of 3.5 cents per share, fully franked, down from 6.5 cents in 2016.