Mercer narrows FY loss, forecasts return to profit in 2013
By Hannah Lynch
Aug. 29 (BusinessDesk) - Mercer Group, the stainless steel fabricator, narrowed its full-year loss on an increase in its stainless division and is forecasting a return to profit in 2013.
The loss was $1 million in the 12 months ended June 30, down from a loss of $9.4 million a year earlier, the Auckland-based company said in a statement. Sales rose 9.2 percent to $33.3 million.
"The company has substantially completed its restructuring and is now concentrating on continuous improvement in its operating growth division as well as searching for new growth opportunities," chief executive Rodger Shepherd said in a statement.
It is forecasting earnings before interest tax depreciation and amortisation in the 2013 financial year to be $3 million to $4 million, up from $1.1 million in the year just reported. Capital expenditure is expected to be $700,000 and interest expenses $300,000.
The sales increase was led by the stainless division, with contracts including Fonterra's Darfield dairy plant, the greenfield Guardians Balclutha plant, an Australian Primo conveyer project and an acid tower for fertiliser group Ravensdown providing the "backbone of work".
Sales in the medical division increased by 18 percent to $3.9 million as the company signed distributions agreement with MMM Group, BHT and Dr Weigert. Sales in the interior division, which manufactures sinks in Christchurch, fell about 5 percent to $8.6 million.
In July, the company paid $1 million for a controlling stake in Titan Slicer, which designs and makes equipment to slice meats and cheese.
Over the past six months Mercer has been rebranded, its financial systems upgraded and its officers and distribution centre in the North Island moved to a new headquarters in Onehunga, Auckland.
Mercer shares are unchanged on 13 cents and have gained about 120 percent this year. The board did not declare a dividend.