PROFIT DROP AT SERVCORP

PROFIT DROP AT SERVCORP

SERVICED office company Servcorp has seen its profit fall, citing New York City, Singapore and Saudi Arabia as the problems.

The company (ASX:SRV) took revenues of $168 million, up 2.3 per cent, but its profit after tax dropped 3.6 per cent to $18 million.

Servcorp reported floor closure costs took a $3.3 million toll on its business, much higher than the cost of $800,000 incurred in the first half last year.

Its global business was to blame: NYC, Singapore and Saudi Arabia, in particular, were described as underperforming. Servcorp's chief operating officer, Marcus Moufarrige, will be relocating to NYC, and CEO Alf Moufarrige taking the helm of South East Asia.

Floor occupancy globally was 73 per cent on average at December 31.

Servcorp says it will defer further growth in preference of consolidating existing floors and accelerating the maturity of new floors. These new floors are in Tokyo, Brussels, Jakarta and Sydney.

Servcorp will pay its shareholders an interim of 13c per share, half franked. Shareholders must hold stock by March 10 and the dividend will be paid on April 5.

The company provided profit after tax guidance of $47 million for the full year.

Servcorp is trading down 1.92 per cent at $6.14 per share at 12.12pm AEDT today.

Business News Australia

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