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Difficult period in store for glass maker

Post Time:May 28,2015Classify:Industry NewsView:419

Newly-listed Metro Performance Glass released a profit for the eight months ended March in line with guidance but warned meeting prospectus targets for the next six months would be difficult.


Chairman Sir John Goulter said the difficult areas included frequent deferrals of projects in both the residential and commercial markets.


Projects in the commercial market were continually experiencing delays.


The timing of glass installation in residential houses following consent was taking longer than the previously correlated nine-month timeframe, he said.


Operating profit for the eight months was $57.8 million, down 3% on the prospectus forecasts.


Reported profit was up 1.6% to $9.6 million. The company would pay a maiden fully imputed dividend of 3.6c per share, below expectations of 4.3cps.


Sir John said the company had a solid start as a publicly listed company.


''The company has captured the growth in the residential housing and commercial property markets, achieved its core financial objectives and completed the opening of its new flagship plant in Auckland. It has been a busy and challenging period and the company is well positioned for the future.''


Forsyth Barr broker Andrew Rooney had an outperform rating on the company but noted the combination of the initial public offering, the plant upgrade in Christchurch and site consolidation and new plant build in Auckland had been challenging.


Operating labour costs were higher than expected and factory constraints through the build resulted in negative economies of scale before it started.


''This dynamic was offset by flat raw materials costs relative to sales and lower overheads and marketing costs.''


Importantly, the Auckland automation project was running both on time and on budget, and the plant was near full operation, excluding the automated edgework machine.


The edgework machine was expected to improve service levels given the demand complexity the current system was struggling with, Mr Rooney said.


The company believed it had maintained market share through the disruptive period.

Source: http://www.odt.co.nz/news/business/343791/difficulAuthor: shangyi

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