Skilled Group has suffered a full-year loss of nearly $17 million due to writedowns linked to its impending takeover by rival labour hire business Programmed Maintenance Services.

Skilled reported a net loss $16.7 million for the 2014/15 financial year, compared to a $44.2 million profit in the prior year.

The 2014/15 result was skewed by a $60 million writedown to Skilled’s fair value ahead of the proposed Programmed takeover.

Skilled’s underlying profit, which excludes the writedown, was down two per cent to $54.2 million.

Revenue grew by 9.5 per cent, led by Skilled’s engineering and marine services division, which accounted for 45 per cent of the group’s revenue during the year.

Skilled chief executive Angus McKay said revenue and earnings were well above 2014 levels as a result of acquisitions and work flowing from the Saipem and Gorgon gas projects.

The group cut costs by $15 million.

“This is a strong operating result for the group, reflecting an improved second half performance,” Mr McKay said.

Mr McKay said the $60 million impairment charge was a non-cash, accounting adjustment that was required due to the implied fair value of the proposed scheme of arrangement with Programmed.

“The charge in no way affects the economics of the Programmed transaction or the benefits that are expected to flow from it for our shareholders,” Mr McKay said.

Skilled said it had completed a strategic review that was announced in 2015.

The review had identified opportunities for Skilled to improve its services to customers.

But implementation of any initiatives from the review were on hold pending the proposed acquisition by Skilled by Programmed Maintenance Services.

WRITEDOWN RESULTS IN SKILLED LOSS

• Reported annual net loss of $16.7m, compared to a net profit of $44.2m in 2013/14.
• Revenue of $$2.05b, up 9.5% on $1.87b.
• Final dividend of 9.5 cents per share, fully franked, in line with 9.5 cents a year earlier.