City Care in 'satisfactory' profit
City Care says it has put its problems behind it and returned to a satisfactory profit as it announces a half year profit after tax of $5.73 million.
The Christchurch City Council-owned company, which maintains the city's roads, parks, facilities, water, sewer and stormwater networks, has steadied its ship.
Last year it posted a profit of just $2.8m from revenue of $381m for the year to June 2013 after spending up large on $25m of plant and equipment and on hiring 706 new staff, to replace nearly 400 who had left and build up resources for the rebuild.
It paid the price with an 83 per cent fall in profit to $2.8m for the June 2013 year compared with $16.5m profit for the previous year.
Chief executive Onno Mulder said yesterday the company had the right amount of work for the resources it had.
It was just replacing staff that left.
"We are not growing as we did."
The company employs about 1000 employees in Christchurch and another 600 around the rest of the country where it performs contracts for several councils and private businesses as well as the Christchurch City Council.
Mulder said its level of spending on plant and equipment had returned to normal and was equal to its amount of depreciation this year.
The half year result was $1.46m higher than budgeted.
It was achieved from revenue of $182.8m and Mulder said the company was on track to achieve its $388m revenue forecast and profit forecast of $10.8m.
"The pleasing half-year result marks City Care's return to a satisfactory level of profitability after a less-than-projected annual result in the June 2013 year," he said.
"We had a number of underperforming contracts, [last year] and that has all been resolved and has worked its way out of the organisation and that is why we are back on track with our profitability."
It meant the company continued to be a key contributor to the rebuild of Christchurch, he said.