17 Apr 2009

Opus cuts costs, but NZ business holding up

5:58 am on 17 April 2009

Infrastructure manager Opus International is cutting its capital expenditure in half and bringing the pursuit of new acquisitions to a virtual standstill as it responds to the global downturn.

The company's businesses in the United Kingdom and Australia, where it has already cut jobs, are continuing to struggle.

But the firm says it is seeing no sign of the downturn in Canada, and expects to maintain current levels of activity in New Zealand, where it still derives the bulk of its earnings.

Opus is primarily involved in public works in both countries so can be expected to benefit from increased government spending on infrastructure.

However, in the United Kingdom, it has already announced plans to cut 75 jobs in a bid to save $6 million, and the company has cut 15 jobs in Australia. Opus has exposure to private-sector developments in Queensland which have taken a significant hit during the recession.

Opus International chief executive Kevin Thompson, says the company does not want to commit any significant amounts of cash or debt on acquisitions until the way forward becomes clearer.

The company is cutting costs across the business, regardless of the country or how well that market is performing, and has slashed its capital expenditure budgets for this year by 50%.

In the UK and Australia in particular, it is continuing what it has termed 'matching resources and workload' - which means if demand does not tally with staffing levels, more jobs could go.

Mr Thompson says while there are no plans for job cuts in New Zealand, that cannot be ruled out.