Metroglass shares tumble to record low as new rival threatens local market
By Rebecca Howard
Nov. 19 (BusinessDesk) - Metro Performance Glass shares fell to a record low as it signalled a possible competitive threat on the horizon.
The shares recently traded down 24 percent at 64 cents when it said a new entrant into New Zealand glass processing was expected from mid-2020.
The new player is looking to enter the New Zealand glass processing market, with a new processing plant near Hamilton, it said. The greenfield development is expected to begin early production in around 18 months. According to Metroglass the new plant may be of a broadly similar scale to Metroglass' Highbrook plant.
The Highbrook factory was completed in 2015 and involve merging five separate Auckland facilities into one automated plant, delivering cost savings and greater production capacity.
Metroglass said it expects the new entrant to focus on the windows market and said it currently provides branded window and door products for joinery fabricators around New Zealand, the majority of which Metroglass currently supplies glass to.
"These fabricators are independently owned and run, and will continue to choose their glass suppliers based on quality, delivery accuracy, product range, technical support and distribution capabilities," it said.
Overall the market penetration of advanced glass products continues to increase and "our largest competitor is currently undergoing a sale process and additional glass processing capacity is being added in New Zealand and Australia alongside the continuing strong levels of construction activity," it said.
The company's stock had already been battered by weak results and had remained under pressure after it announced it expects group earnings before interest and tax in the 2019 financial year to be at the lower end of its target range of $30 million-$33 million, largely due to weak year-to-date results in Australia.
It is due to release its half-year result next Monday. Today also marked new chief executive Simon Mander's first day at the helm.