Soon-to-be acquired Australian staffing firm Skilled Group (SKE: ASX) today reported revenue of AUD 2 billion (USD 1.5 billion) for the year ending 30 June 2015, an increase of 9.3% compared with AUD 1.9 billion (USD 1.4 billion) the previous year but the company’s staffing business continued to decline. 

Angus McKay, CEO of Skilled Group, commented: “This is a strong operating result for the group, reflecting an improved second half performance. Our revenue and EBITDA are well above FY14 levels, predominately as a result of acquisitions and work flowing from the Saipem and Gorgon [oil & gas] projects in particular. Also, as expected, we have delivered AUD 15 million (USD 11 million) in cost savings in FY15.”

Skilled Group operates three primary business segments, the largest of which is Engineering & Marine Services, which provides contract maintenance, project shutdown services and offshore marine manning and management services. The company’s Workforce Services segment provides blue-collar temporary workers, known locally as labour hire, to clients in the industrial, mining, and resources sectors. The Technical Professionals segment provides engineering and technical professional staff, in addition to white-collar and nursing staffing.

In June 2015, Skilled Group announced that the company had reached an AUD 422 million (USD 310.4 million) takeover offer from Programmed Maintenance Services (PRG: ASX), a provider of staffing, maintenance, and facility management services. The takeover bid is subject to Australian Securities and Investment Commission (ASIC) and Court approval. The first court date has been set for 21 August, with a second scheduled to take place on 1 October. The acquisition is expected to be finalised on 16 October 2015.

Revenue during the year was broken down by business segment as follows:

The strong growth in the Engineering & Marine Services segment stemmed predominately from the acquisition of maintenance and project delivery services firm Thomas & Coffey, which was acquired in February 2014. 

This revenue growth was tempered by declines in the Workforce Services segment, which continues to be impacted by the slowdown in mining and resources.

The slowdown in the global oil & gas market also impacted the company’s Swan Contract Personnel business, part of the Technical Professionals segment. The business specialises in the provision of project management, engineering, and project support labour to the onshore and offshore oil & gas, petrochemical, mineral, and infrastructure sectors.

Looking forward, the construction phases of the Saipem and Gorgon projects are expected to conclude during the next 12 months, which will impact Skilled’s Marine Services segment. However, the company is confident that both the Engineering and Marine Services businesses have positioned themselves for the work that will arise as the projects shift from the construction phase to production.

While the company expects improvement in the white-collar recruitment and training services, the Swan business is likely to remain weak.

In trading today, the company’s share price closed up 3.8% at AUD 1.64 (USD 1.21), a decrease of 27% compared with a year ago. Based on its current share price, the company has a market value of AUD 386.9 million (USD 284.5 million).