Mercer to sell unprofitable medical division for $2mln
By Paul McBeth
Oct. 6 (BusinessDesk) - Mercer Group, the stainless steel fabricator and manufacturer, has agreed to sell its unprofitable medical division for $2.03 million, kicking off an asset sale programme signalled in August when the company wrote off $6 million from the value of goodwill, assets and inventory.
The Auckland-based company will sell the medical unit to CR Kennedy NZ, the local subsidiary of the medical, photographic, CCTV and survey equipment distributor, Mercer said in a statement. The sale is unconditional and is the first step of a planned restructure to focus Mercer's business on its core businesses including Titan Slicers, stainless steel fabrication and food-processing technology, it said.
In August, Mercer reported a loss of $6.7 million in the year ended June 30, due largely to the writedown in the value of its assets, including a reduction in the medical unit's value to $1.9 million from $2.8 million a year earlier. The division posted an earnings before interest, tax, depreciation and amoritsation-loss of $369,000, compared to a profit of $468,000 in 2014.
The company is also looking at selling its interiors business, which makes and supplies sinks, basins, tubs, toilets and similar products, and lowered the value to $4.8 million as at June 30 from $8.5 million a year earlier.
Mercer shares were unchanged at 5.1 cents, and have slumped 75 percent this year.