Friday 24th August 2018
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Metro Performance Glass's shares dropped 4.8 percent after the company downgraded its guidance at its annual shareholders' meeting this morning due to weakness at its Australian division.
According to its presentation filed to the NZX, Metro Glass expects group earnings before interest and tax in the 2019 financial year to be at the lower end of its target range of $30 - $33 million, "as a result of weak year-to-date results in Australia following a period of significant change."
The shares recently dropped 4 cents to 80 cents, and have fallen 16 percent this year.
In the 2019-to-date trading update, the company said financial performance in New Zealand was "on‐target and ahead of the same period last year" but "unfortunately Australia is not in the same position".
"Our recent capital investment program, related equipment commissioning and the opening of the new Tasmanian plant highlighted gaps in organisational capability," the company said. "Service levels are now improving and we’re focussed on building the required capabilities to achieve better returns, however as we’ve observed in New Zealand this will take time."
Metro Glass said it would provide a further update at its half-year results in November.
In May, the company reported full-year profit for the year to March 31 fell 16 percent to $16.3 million because of softer growth in New Zealand and capital programme disruptions in Australia. Sales rose 10 percent to $268.3 million, including 12 months of trading from Australian Glass Group.
Metro Glass acquired Australian Glass Group in Sept. 2016, and in the 2017 financial year 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.
AGG's profitability was below expectations in 2017 due to the longer than anticipated disruption from the capital programme and ongoing poor machine reliability in the Sydney plant, but Metro Glass said this had been addressed and its outlook was for significant growth opportunities.
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