Mercer to sell unprofitable medical division for $2mln

Tuesday 6th October 2015

Mercer Group, the stainless steel fabricator and manufacturer, has agreed to sell its unprofitable medical division for $2.03 million, kicking off an asset sale programme signalled in August when the company wrote off $6 million from the value of goodwill, assets and inventory.

The Auckland based company will sell the medical unit to CR Kennedy NZ, the local subsidiary of the medical, photographic, CCTV and survey equipment distributor, Mercer said in a statement. The sale is unconditional and is the first step of a planned restructure to focus Mercer's business on its core businesses including Titan Slicers, stainless steel fabrication and food-processing technology, it said.

In August, Mercer reported a loss of $6.7 million in the year ended June 30, due largely to the writedown in the value of its assets, including a reduction in the medical unit's value to $1.9 million from $2.8 million a year earlier. The division posted an earnings before interest, tax, depreciation and amoritsation-loss of $369,000, compared to a profit of $468,000 in 2014.

The company is also looking at selling its interiors business, which makes and supplies sinks, basins, tubs, toilets and similar products, and lowered the value to $4.8 million as at June 30 from $8.5 million a year earlier.

Mercer shares were unchanged at 5.1 cents, and have slumped 75 percent this year.

BusinessDesk.co.nz

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