Downer’s review of Spotless in line with expectations

Company News

by Kathy Skantzos

Management services company Downer Group (ASX:DOW) has completed a review of Spotless Group which it has an 88 per cent share in, with underlying earnings for the first four months of the 2018 financial year consistent and in line with the company’s expectations.

Downer CEO Grant Fenn said the outcome of the review was positive, with cost synergies expected to exceed original estimates.

He said around $25 million has been identified in annualised procurement savings, while revenue opportunities are also significant and continue to increase.

Downer is targeting consolidated NPATA of $295 million, including $93 million for Spotless.

A long-term contract for facility management services at the Royal Adelaide Hospital has been identified as underperforming since commencing operations in September this year, in the first year of a 30 year term.

Shares in Downer (ASX:DOW) closed 0.29 per cent higher to $6.73.

Kathy Skantzos

Finance News Network
Kathy presents the Market Outlook and ASX company news. She joined FNN in September 2017. She has been in print and online journalism for over 9 years. She also worked in corporate communications.