Engineer Cardno says trading has been softer than expected so far, but it expects a better result for the year.
Engineer Cardno says trading has been softer than expected so far, but it expects a better result for the year.

Engineering firm says trading worse than hoped

ENGINEERING and consultancy outfit Cardno has warned trading has been "softer than expected", with problems continuing with it not winning big projects in Australia.

Infrastructure work in Texas and Florida was also underperforming, Brisbane-based Cardno said at its annual general meeting on Wednesday.

But Cardno, started by two Brisbane engineers as WWII wound down, also believes earnings this year should improve on last year's results. That forecast was based on "current momentum".

Cardno employs more than 6000 staff globally and projects range from infrastructure development at Springfield near Ipswich to environmental work with a US air force base in Alaska.

In recent years, it is largely under control of private equity outfit Crescent Capital Partners.

Cardno filed a net loss of $14 million last year, but a large part of that was due to changes in tax laws from the US Trump administration. On its preferred basis of underlying earnings before interest, tax, depreciation and amortisation, the company earned $56.2 million, near the bottom of guidance.

At its AGM, held in Sydney, where Crescent is based, chairman Michael Alscher told investors "we believe (2018) is the last year we will see material impacts on the financial results as a result of past mistakes and decisions". Crescent has previously blamed old management and boards for troubles bedevilling Cardno, a former stockmarket darling.

Performance in the first quarter of 2019 had been "a little softer than expected, with some businesses ahead of budget and others starting more slowly", Cardno said.

Its work on aid programs in Asia Pacific was exceeding expectations, while its engineering-linked work in the Northern Australia was meeting forecasts, the company said. In Australia's south, the core business was good but "missing key multi-year contracts" was impacting on financial performance.

The AGM's resolutions largely sailed through smoothly, although a 31 per cent protest vote emerged against 5.6 million options being issued to new chief executive officer Ian Ball. About 3.6 million of the options can be converted into stock if Mr Ball pays $1.18 for each option after working at Cardno for four years, and 2 million can be converted at a $1.90 price after five years.

Cardno shares closed up 1c at $1.075. Last year, its shares were trading at $1.525.