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Metro Performance Glass full-year profit falls 16% in line with guidance

Thursday 24th May 2018

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Metro Performance Glass said its full-year profit fell 16 percent because of softer growth in New Zealand and capital programme disruptions in Australia. 

Net profit was $16.3 million, or 8.8 cents a share, for the 12 months to March 31 versus $19.4 million, or 10.5 cents a share, in the prior period, the Auckland-based company said in a statement. That was in line with guidance it gave in April. Sales rose 10 percent to $268.3 million, including 12 months of trading from Australian Glass Group. Earnings before interest and tax before significant items were $30.9 million versus $33.9 million in the prior period.

“The group had a busy transitional year as it adapted to the softer growth in NZ, implemented an extensive capital investment programme and conducted a strategic review of the business," said chair Peter Griffiths  

Metroglass will pay a final dividend of 3.8 cents per share on July 24, taking the total dividends for the year to 7.4 cents.  

The company said its capital investment programme of $20.6 million went largely to plan in New Zealand but the Australian programme proved challenging with significant shipping disruptions extending the planned shutdown period, which impacted the full year result.

AGG had full-year revenue of $55.4 million supported by growing Victorian double glazing sales, compared to $30.5 million for the seven month period a year earlier. Profitability was below expectation due to the longer than anticipated disruption from the capital programme and ongoing poor machine reliability in the Sydney plant. This has been addressed by the capital programme, it said. 

In New Zealand, revenue was flat at $212.9 million, with Canterbury activity driving a 2 percent decline in residential revenue.

Looking ahead, it expects activity to remain close to the current levels in New Zealand for the coming 12 months, with further Canterbury declines being offset by growth in other regions. , “After very strong sales growth over a number of years, we expect that over the next 24 months activity in our core NZ market will remain flat before softening over the medium term," said Griffiths. 

In Australia, it said overall market activity may soften but AGG will still have significant growth opportunities ahead of it. 

For the current financial year, it is targeting group ebit of between $30 million and $33 million, capital expenditure of about $10 million and debt repayment of between $7 million and $10 million. The company also expects to maintain its current dividend policy, it said. 

The company also presented the outcome of its strategic review and said its four main strategies are to deliver market leading services to customers, to develop its organisational capabilities, to maintain its scale position and to leverage scale and assets to deliver the lowest total delivered cost. 

According to Griffiths, Metroglass will continue be a customer dedicated organisation but the focus has "shifted from expansion and diversification, to optimisation and enhancement of our internal capability to execute."

The stock last traded at 82 cents and has shed 18 percent so far this year. 

(BusinessDesk)

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