Nuplex On Track For Record Profit
Nuplex On Track For Record Profit (Statement made by Fred Holland, Chairman, Nuplex Industries Limited)
Nuplex remains on track to post a record year end net surplus in excess of 50% up on last year’s full year result of $12.6 million. This is in spite of off shore earnings being significantly impacted by the strong New Zealand dollar relative to Australian and US currencies.
A decision to write down the carrying value of under performing Australian subsidiary, Medihold, has trimmed Nuplex’s record operating surplus after tax of $12.3 million to $9.4 million for the six months ending 31 December 2002. This is $234,000 less than the profit attributable to shareholders for the same period last year when abnormals were nil. Earnings per share were 15.7 cents (16.5 cents)
While the write down of $2.9 million in the book value of Medihold has diluted the six-month performance, underlying business results show the group is performing well. This has set the company on track to achieve its best ever financial result.
Directors have declared a dividend of 9.5 cents per share, an increase of 19% on last year’s interim dividend.
The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 32% to $35.4 million.
The key to the company’s growth in operational profit was a 48% increase in sales revenue to $316 million.
The three geographic locations in which the company operates – New Zealand, Australia and Vietnam – all contributed to increased sales, but the outstanding achievement was in Australia where sales revenue increased by 55% to $233 million.
Asia Pacific Specialty Chemicals, which was acquired in July 2002, was a major contributor to growth in Australia, and this company is exceeding original forecasts. Its operations are being quickly merged into those of the group and further benefits will be gained from the synergies.
Australia contributes 74% of group sales and its importance to the company’s performance is an endorsement of directors’ policy of positioning Nuplex as a manufacturing and marketing group with an Asia/Pacific focus.
Operations in Vietnam increased sales by 14% to $7.7 million. New manufacturing facilities in Vietnam, to be commissioned later this year, will substantially increase this region’s production capabilities and product range.
New Zealand operations generated sales of $75.3 million, up 32%, assisted by a surge in construction and the inclusion of sales from the acquisition of APS.
Tax expense, at $6.8 million was up by $2 million. Profitable trading in Vietnam has absorbed all prior tax losses. Tax is now payable in New Zealand on earnings less tax paid in Vietnam. The expense for this half includes a prior period adjustment of $364,000.
Interest expense at $8 million, was up $3.3 million reflecting the cost of Capital Notes used to finance the APS purchase.
The write down in the book value of Medihold eliminates the remaining goodwill. The proposed sale of this business to Stericorp remains under evaluation by the Australian Consumer and Competition Commission.
The 9.5 cents dividend represents 61% of the six-month net surplus and will carry 100% imputation credits for New Zealand resident shareholders. A supplementary dividend of 1.67648cps will be paid to non resident shareholders under the terms of the Income Tax Amendment Act (No3) 1993.
Dividend Reinvestment Plan will apply to this interim
dividend, to be paid on 4 April 2003 on shares registered at
5pm on 21 March