Nuplex lifts annual profit 35%, beating estimates; Europe, Asia drive growth

Friday 14th August 2015

Nuplex Industries, which makes resins used in industrial coatings and paint, increased annual profit 35 percent, beating expectations, on earnings growth in Europe and Asia.

Net profit rose to $70.8 million, or 35.9 cents per share, in the 12 months ended June 30, from $52.4 million, or 26.4 cents, a year earlier, the Auckland based company said in a statement. That beat Forsyth Barr's forecast for profit of $65.8 million.

Stripping out the businesses Nuplex sold in the year, underlying profit rose 398 percent to $63.4 million on a 1.4 percent increase in sales to $1.37 billion. Operating earnings before interest, tax, depreciation and amortisation rose 15 percent to $127 million, within Nuplex's guidance for Ebitda from continuing operations to be between $124 million and $128 million.

"A significant improvement in earnings was driven by a strong contribution from Europe, growth in Asia, gains in the Americas and a turnaround in Australia/New Zealand," chief executive Emery Severin said. "Our growth platform in Asia, the technologies and products coming through our research and development pipeline and our ongoing focus on driving operational efficiency and disciplined margin management sees Nuplex well placed to deliver improved returns and grow earnings in the coming years."

Nuplex has been cutting back operations in Australia and New Zealand, where a weaker performance is weighing on growth in Asia, America and Europe. In November it sold its Australasian agency and distribution business Nuplex Specialties and its plastic additives business Nuplex Masterbatch for A$127.5 million to focus on global resins. It used the sale proceeds to reduce debt and plans to buy back as much as 5 percent of its shares.

The board declared a final dividend of 17 cents per share, payable on Oct. 12 with a Sept. 28 record date. That takes the annual dividend to 27 cents, up from 21 cents a year earlier.

The shares last traded at $4.18, and have climbed 40 percent this year.

BusinessDesk.co.nz

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