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Skilled Group Ltd (ASX:SKE) Chief Executive Mick McMahon told the annual meeting in Melbourne this morning that, as expected, trading conditions had remained "challenging" in the first half of FY14, reports Australian Business News. Activity levels remained subdued compared with both the previous corresponding period and the second half of the financial year 2013.
Overall trading was in line with internal budgets in Q1.
The Workforce Services division has seen continued price pressure in the mining sector impacting margins; overall activity levels appeared to have stabilised with increased activity expected in the telecommunications and infrastructure sectors.
Technical Professionals saw reduced activity in mining and related engineering services, primarily in Swan and Damstra (both cycling a peak period in the first half of the 2013 financial year); partially offset by activity in telecommunications and training.
Engineering & Marine Services was affected by some deferral of client activity; however, growth was expected from increased activity levels in oil & gas and maintenance services, weighted towards the second half of the year.
The transformation and cost reduction program was expected to deliver at least a further AUD 10 million in the financial year 2014 from initiatives under way, with a higher proportion of savings to be delivered in the second half of the year.
Mr McMahon said the group was well-positioned to maintain a strong balance sheet to support dividends and invest for future growth.