Skilled Group (SKE) shares bounced 10% at one stage yesterday after Monday’s nasty and out of the blue sell-off prompted the labour-hire group to issue a market update.
The shares rose to end the day on $1.38, up 8.6%.
The sharp rebound in Skilled shares was noteworthy, given the selling wave in the local market and much of Asia yesterday was caused by another slide in oil prices.
As strong as it was, that left the shares still down nearly 8% so far this week after that sell-off on Monday.
The shares are down 50% in the past six months as the employment market has slowly worsened.
SKE YTD – Small bounce back in Skilled shares
Skilled shares plunged 16% for no apparent reason, which prompted a “please explain" from the ASX on Monday, which specifically asked the company whether it had plans to announce an earnings update for the six months to December 31 that might “differ materially” from previous guidance.
No, replied Skilled Group with CEO Mick McMahon saying, “We see no reason for the recent fall in share price, and expect no near term impact from the recent fluctuations in oil prices”.
He said in the one-page market update that the company’s cost savings target for FY15 and said cashflows are in line with expectations.
The company is doing it tough as the drop-off in mining investment spending has weighed on its operations.
“Consistent with commentary at the AGM,” the statement said:
"Engineering and Marine activity levels remain strong with; a continued pipeline of opportunities in Engineering shutdowns and maintenance; and overall activity levels in Australia and New Zealand supported by the Saipem contract and recent contract wins in OMSA;
Market conditions in Workforce Services remain challenging;
Technical Professionals performance remains in line with previous commentary, with broadly stable contractor numbers in Swan and some positive trends in permanent placements, telecommunications, health and training services;
Additional cost savings targeted for FY15 are on track, with the benefit to be achieved in 2HFY15, and cashflows are in line with expectations;
The acquisition of the remaining 50% of OMSA has been completed and integration is progressing."
So the company “sees no reason for the recent fall in share price, and expect no near term impact from the recent fluctuations in oil prices.”
In relation to the previously advised CEO succession, Chairman Vickki McFadden confirmed that “The Board is very pleased with the process to date, which is well advanced. "
