Dorchester shares jump on improved profit guidance

Dorchester shares jump on improved profit guidance

By Kristen Paterson

March 21 (BusinessDesk) - Dorchester Pacific lifted its profit guidance for this year and next on a better-than-expected contribution from newly acquired EC Credit Control and better returns from finance and insurance. Its shares jumped 7.1 percent.

The Auckland based savings, insurance and loans company said profit in the year ending March 31 will be $1.2 million to $1.3 million, up from the $1 million it forecast with its first-half results in November. Profit in 2014 would be $5 million to $6 million, up from the earlier estimate of $4 million to $5 million.

Dorchester acquired Australian debt collector EC Credit in October for $18.5 million in cash, stock and earn-outs and its full-year results will include five months contribution.

"EC Credit has traded ahead of forecast for the first five months since the Oct 1 effective acquisition date,” chief executive Paul Byrnes said in a statement.

EC Credit has already secured two new large contracts which will underpin revenue growth for the next year, Byrnes said. All three of Dorchester’s divisions are now trading ahead of budget, he said.

The company made some other small net gains on EC Credit transaction costs, a partial write-back of tax assets and the surrender of office space.

Dorchester is looking at further expansion, with chairman Grant Baker saying that further merger and acquisition opportunities will be evaluated.

“With up to $20 million cash injection expected in June from the exercise of the options on issue, the company is in a good position to add to this revised forecast profit with earnings from any further acquisition," he said.

The stock rose 2 cents to 30 cents and has fallen about 9 percent this year.

(BusinessDesk)

© Scoop Media