Metroglass again downgrades after poor Australian result

A Metro Performance Glass delivery truck. Photo: Supplied
A Metro Performance Glass delivery truck. Photo: Supplied
Metro Performance Glass has for the second time in four months downgraded its expected earnings, after its Australian operations again failed to come up to expectations.

Metroglass shares slumped more than 7.5% to 48c after the Monday announcement, or down 35% on a year ago, and retraced 1c yesterday.

Metroglass chief executive Simon Mander said the Australian Glass Group had had a ''very disappointing year overall'' and ''financial improvements have lagged our expectations''.

However, Australia was working ''to a clear plan'' making good progress operationally, he said.

In August, Metroglass said earnings before interest and tax (ebit) would be at the lower end of its $30million-$33million, then in November cut that to $28million, and yesterday cut further to about $25million.

Its Australian assets will also attract a $7million-$10million, non-cash, write-off of asset valuation.

Craigs Investment Partners broker Peter McIntyre said while the New Zealand performance was ''in line with expectations'', Australia's performance was ''poor''.

''The downgrade is driven by an even worse finish to the year in Australia than expected,'' he said.

He noted last year's first-half ebit for Australia was $2.3million, while this year it booked a $1.3million loss.

Mr Mander said Australian customers were ''impacted by variable service levels'' in 2018 but the company had ''markedly improved'' service delivery, reduced reworks and had a more stable and engaged workforce.

Metroglass remained on track for capital spending of about $8million and reduction of its $95.2million debt, as at September, by about $7million.

The Metroglass float in July 2014 raised $244.2million and private equity owner Crescent Capital and Anchorage Capital took $230.5million of the proceeds. Another private equity firm, Bain Capital, took an 11% stake late last year for its Special Situations Asia Fund, BusinessDesk reported.

simon.hartley@odt.co.nz

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