Troubled debt collector RMG expects to staunch the red ink in the next couple of months as its restructuring efforts under new boss Don Bourke begin to bite.
Losses for the six months to December ballooned from A$3.9 million ($4.23 million) to A$6.5 million. This compares with annual losses for the year to June of A$9.3 million.
Bourke, the former Consolidated Press and Brierley Investments executive appointed executive chairman in September, said he had not been able to influence the October result.
The months of December and January were "notoriously poor" because of public holidays and people taking annual leave.
"When you join a company that needs to be turned around it's a little bit like someone being appointed to a new Government," Bourke said.
"You've got 100 days to start making things happen and roughly that's the period I work on."
RMG, part-owned by Eric Watson's Cullen Investments, has had a tough time since it was formed in the merger of 22 Australian and New Zealand companies four years ago. It is one of the largest debt-management groups in the Southern Hemisphere.
Bourke said early indications for this month showed streamlining measures were beginning to bite.
These included performance-based incentive programmes, boosting afternoon and evening work, reducing staff turnover and improving the debt collection technology.
In a show of support, the board said it was "pleased with the significant progress being made since the appointment".
It said the company was "confident" that capital raising and restructuring plans would result in a positive cash position in the third quarter and net profit by the fourth quarter of this year.
Half-year revenue rose 10 per cent on the same period last year at A$16.3 million, thanks to the acquisition of new debt portfolios.
At the RMG annual meeting last November, shareholders approved an issue of 377,491,000 convertible notes at 2Ac.
After the meeting, RMG placed 116,000,000 more shares at 2.5Ac, bringing total new capital to A$10.4 million. RMG also announced an underwritten 1-for-4 share-rights issue to existing shareholders to raise an additional A$5.5 million.
The company said the issue of notes was needed to keep the company free of debt.
Bourke said he was "very pleased" with the support the company had received after discussions with major shareholders.
Cullen Investments has advised it will be taking up its full entitlement.
The issue is fully underwritten by EL & C Baillieu Stockbroking.
Bourke said the issue would "get the balance sheet right".
Collection time
RMG hopes to improve matters by:
* Bringing in performance-based incentive programmes.
* Boosting afternoon and evening work.
* Reducing staff turnover.
* Improving debt-collection technology.
Debt collector’s outlook brightens
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