Neptune up on restructure progress
Neptune up on restructure progress

UPDATE 2.30pm: Shares in Neptune Marine Services jumped after the company said it had delivered on key elements of its restructure and recovery strategy.

The oil and gas services contractor said it had finalised $9.5 million in annual cost savings, made good progress with its plan to offload non-core assets and was in the process of renewing its board.

"Neptune is also pleased to report that its underlying operations remain stable, posting a break-even result before interest and tax for the March quarter as restructuring measures begin to take effect," the company said.

The company said it no longer held any long term debt following asset sales.

Neptune said it was also looking to sell its remote-operated vehicle support vessel, as well as its Australian fabrication and US diving businesses.

The oil and gas services company was forced to raise $60 million earlier this year in a deeply discounted rights issue to avoid collapse after a failed expansion strategy led by former chief executive Christian Lange.

Neptune's new acting chief executive Robin King said wide-ranging changes to Neptune's operational structure since then meant the company was better placed to deliver on its primary objective of restoring profitability and shareholder value.

"The cost saving initiatives have left the company with a simplified structure and ushered in the new, 'back to basics' Neptune," he said.

"We anticipate the recent changes, to simplify and restructure the company, will have a greater impact on our bottom line in the 2012 financial year.

"The current half is about getting the structure of the business right to leave Neptune well placed for growth."

Neptune said it continued to win new contracts since the beginning of this calendar year with customers such as BHP Billiton, Origin Energy, and Monadelphous at the Gorgon project.

Neptune said it planned to appoint three new non-executive directors to the board via a succession plan following an appropriate transition period.

It said it was working with independent consultants Gerard Daniels over its board renewal plans

"Neptune and Gerard Daniels are working together to identify and enter into discussions with candidates who possess the skill sets and characteristics that are the necessary elements for the board going forward," the company said.

Neptune shares closed up 0.6 cents, or 18.18 per cent, at 3.9 cents after hitting an earlier peak of 4.1 cents.

The West Australian

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