Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Mercer halves full-year earnings forecast

Mercer halves full-year earnings forecast on increased costs, slow sales

By Suze Metherell

May 8 (BusinessDesk) – Mercer Group, the stainless steel fabricator, cut its full year earnings guidance in half after slower than expected sales growth and higher staff costs in anticipation of future growth.

Auckland-based Mercer said it expects earnings before interest, tax, depreciation and amortisation to be about $1 million for the year ending June 30, down from its February forecast of $2 million and last year’s Ebitda of $2.5 million. In the first half, Mercer had Ebitda of $1.1 million.

The company said slow sales growth and delayed stainless steel contracts had combined with costs taken on in anticipation of growth, denting profit. Mercer wants to expand to the North American titan market and has previously signalled staff hiring would impact earnings over the coming year.

“This growth is taking somewhat longer to develop, however progress is being made and the directors are confident with the plan being pursued,” the company said in its statement today.

Mercer hired former senior Fairfax New Zealand and PMP executive Rodger Sheppard to head the company in 2011 after a strategic review of the business.

The company had a series of setbacks during the global financial crisis in 2008, when it was caught out with too much debt on its books and halted repayments to South Canterbury Finance, when Alan Hubbard was a cornerstone shareholder, after breaching its banking covenant.

In January Milford Asset Management snapped up a 5.2 percent stake in the company after a dispute between Hubbard’s widow and the statutory managers of the various Hubbard entities was settled last year.

The metal producer said today it will receive $1 million in funding over the next two years from the Callaghan Institute, the government innovation fund, for its sterilization technology, S-Clave. It will use the cash for development with the aim of bringing it to market in the next two to three years.

Mercer shares last traded at 17 cents and have gained 6.3 percent so far this year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Bad Day For Rope: Donaghys Job Losses Another Blow To Dunedin

The loss of 30 jobs from Donaghys rope and twine factory is yet another blow to the people and economy of Dunedin, says Dunedin South Labour MP Clare Curran. More>>

ALSO:

Oil: 2014 New Zealand Petroleum Summit

Simon Bridges: Our abundance of energy and minerals resources provides us with unique opportunities to build the New Zealand economy.

Over the past three years the Government has made significant changes to how the sector is regulated. More>>

ALSO:

WWF Report: Solutions In Reach; World Biodiversity Suffers Major Decline

Global wildlife populations have declined by more than half in just 40 years as measured in WWF's Living Planet Report 2014. Wildlife's continued decline highlights the need for sustainable solutions to heal the planet... More>>

ALSO:

Scoop Business: NZ Dollar Catches Breath After "Goldilocks" Slump

The New Zealand dollar edged up following its dramatic slump yesterday after the Reserve Bank confirmed speculation it intervened in the currency market last month and PM John Key suggested a “Goldilocks” level far lower than at present. More>>

ALSO:

Biosecurity: Kiwifruit Claim To Hold Officials Accountable For Psa

Kiwifruit growers have joined forces to hold Biosecurity NZ accountable in the courts for its negligence in allowing 2010’s Psa outbreak that devastated New Zealand’s kiwifruit industry and exports. Foundation claimants representing well ... More>>

ALSO:

Poison: Anglers Advised Not To Eat Trout In 1080 Areas

With the fishing season opening in just a few days (1 October 2014), anglers are being warned by the Department of Conservation(DOC) not to eat trout from pristine backcountry waters and their downstream catchments, where the department is conducting 1080 poisoning operations. More>>.

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news