Takeover target Nuplex’s profit down; expectations up

In maker and takeover target Nuplex has booked a dip in half-year profits, but slightly upgraded its full-year expectations on earnings before interest, tax, depreciation and amortisation (ebitda).

US private equity fund Advent International, via its Belgian company Allnex, this week made a $1.04billion "indicative and non-binding'' offer for Nuplex, with six weeks to negotiate a deal.

The offer was for $5.55 a share, but with Nuplex announcing a 12c interim dividend yesterday, the offer declines to $5.43.

Nuplex shares rose 0.4% to $5 after the announcement.

Nuplex chief executive Emery Severin said he expected no material issues to arise while Allnex was undertaking due diligence, and expected to update shareholders in six to eight weeks on the takeover proposal.

For the six months to December, Nuplex's revenue rose 2.1%, from $685.8million to $700.5million, with operating ebitda up 20.6%, from $54.5million to $65.7million. However, after-tax profit was down 33.2%, from $37.3million a year ago to $24.9million.

Mr Severin said the $12.4million decline in profit included $1.9million as a result of "discontinued operations'' and $2.5million in "significant expenses''.

The previous year's $37.3million profit included $12.1million in benefits from "significant items'' and discontinued operations.

Ebitda expectations for the full year had risen from $140million-$150million to $145million-$157million, boosted by better Asian growth, an "ongoing steady'' performance from the Americas and a boost from strong housing and construction in Australia and New Zealand, Mr Severin said.

Initiatives started in recent years were expected to be realised increasingly in 2017 and 2018, he said.

simon.hartley@odt.co.nz

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