UGL cuts 200 jobs

UGL is planning to cut 200 jobs as it announces a downgrade in full-year revenue.

The engineering group said it would save $33 million annually from fiscal 2016 by reducing staff numbers.

In November 2014, UGL announced it would undertake a comprehensive review of its operations.

“We are well advanced in a significant overhead restructure program to right size the organisation for a new business structure which removes the duplication of roles as the company has transitioned to a standalone engineering company following the sale of DTZ,” UGL said.

The company expects to generate FY15 revenue of $3.1bn and underlying EBIT of $75m.

However the 2H15 statutory result will be impacted by $74m of one‐off charges and provisions to complete the reset of the business including restructuring and property consolidation costs, removal of prior year capitalised tender costs and further write‐offs associated with continued settlement of long‐dated WIP and dispute claims.

Year to date, UGL has secured $2.1bn in new contract wins and renewals and the committed order book as at 31 May 2015 was $5.1bn.

“Strong tender activity is occurring across transport infrastructure, LNG maintenance and rail opportunities with UGL well positioned on a number of significant near term opportunities,” the company said.

UGL’s CEO Ross Taylor said he was confident the company would deliver improve profitability from FY16.

“In FY16, we expect to deliver revenue in line with FY15 with around 70 per cent of FY16 revenue already sold. With improved project execution and the full realisation of overhead cost savings, our FY16 EBIT margin is expected to return to 3 per cent.  Cash flow conversion will return to a minimum of 70 per cent (of EBITDA less interest and tax) from FY16, excluding Ichthys CCPP,” Taylor said.
 

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