Opus cuts four executive jobs as it restructures in 'competitive market'

Opus International Consultants [NZX: OIC], the listed engineering firm, has trimmed its executive team as it restructures its business "in an increasingly competitive market".

The Wellington-based company will shrink its leadership team to eight from the existing 12, retaining its chief executive, chief financial officer, four country managing directors, director of business development and growth, and the company secretary, without saying what jobs were going it said in a statement. The changes are effective immediately.

"The new structure is oriented to an increasingly competitive market and is designed to increase efficiency and profitability," chief executive David Prentice said.

According to its 2013 annual report, Opus previously had a chief technical officer, Sulo Shanmuganathan, a director of organisational development, Mike Eagle, a director of information management and technology, Richard Croad, and director of service excellence, Ben Holland. None of these positions or names feature on Opus's website today.

Last month, Opus embarked on a review of operations after flagging the loss of an undisclosed project would weigh on profit margins and cost it $5.5 million in the year. The loss of the large project, which was in "a non-traditional discipline with unique and unusual complexities", would weigh on its New Zealand earnings, the company said. First-half margins were squeezed by the loss on a project and bidding costs of $1.9 million, and those costs were expected to rise to $5.5 million in the full financial year.

In August, the company reported New Zealand revenue rose about 5 percent to $147.9 million while earnings before interest and tax declined 5 percent to $11.2 million in what the company described as "variable market conditions." Overall it reported a 6 percent gain in first-half profit to $9.9 million, reflecting the contribution from the Stewart Weir business acquired in 2013, which drove a jump in earnings in Canada. Group revenue jumped 25 percent to $265 million.

Shares of Opus rose 0.7 percent to $1.49 and have declined 25 percent since the start of the year. The stock is rated an average 'buy' based on the recommendation of four analysts compiled by Reuters, with a median price target of $1.81.

(BusinessDesk)