Metro Performance Glass Limited (ASX: MPP) has informed the market about its latest trading performance, and guidance on awaited outcomes for FY19 ended 31 March 2019.
The company is a supplier of flat glass and other associated products for the residential and commercial building segments in New Zealand and Australia. Its glass products comprise mirrors, decorative glass, safety and security glass, speciality glass etc. Its subsidiaries include Metropolitan Glass & Glazing Limited, Glass Tech, Christchurch Glass, Mainland Glass & Glazing Ltd and many more.
The company’s performance in New Zealand had sustained and was in accordance with its expectations. During the first half of the fiscal year, the gross profit margin of MPP reflected an improvement, which remained unaffected even in the second half of the year, with the support of operations and efficiency initiatives.
In Australia, MPP’s subsidiary Australian Glass Group (Holdings) Pty Ltd (AGG) went through a transformative phase, but its performance was unsatisfactory throughout the year. AGG mainly services the new detached residential, and modifications along with market divisions in South East Australia. It is not as much exposed to the important declines being observed in multi-residential approvals throughout Australia.
For FY20, the activity levels are expected to alleviate in AGG’s targeted markets. AGG is well positioned to benefit from a roadmap of legislative alterations, which would aid in rising penetration of double glazing in the Australian region from medium to long term duration.
Mr Simon Mander, CEO of MPP stated that the company would continue to concentrate on aspects that matter to its clients and shareholders. MPP would enhance its executions and deliver its financial performance. The company had developed throughout all the sections, but its FY outcomes demonstrated that its business in New Zealand and Australia were at separate phases of delivery against the company’s strategy.
MPP is on track to attain its targets for capital spending of around $8 million and debt reduction of around $7 million in FY19. The results of the decline of Australian operating performance in the latter half of the fiscal year twofold. The first one is the financial effect from Australian results, which is a decrease of around $3 million in the company’s earnings, taking its earlier Group EBIT guidance coming down to around $25 million from $28 million. The second one is a preliminary review of the carrying value of the company’s Australian investment, which recommended that an impairment in the order of $7 million to $10 million to the intangible assets would be correct. Impairment of intangible assets considered in the year ended 31 March this year would be a non-cash charge.
The company would be declaring its FY19 results ending 31 March 2019 on 13 May 2019.
MPP declared its first six months unaudited results ending 30 September 2018 on 26 November 2018. The company recorded the revenue of $140.5 million (-1%), EBIT of $15.5m (?18%) and NPAT of $9.1m (?22%), influenced by poor trading outcomes in Australia. The revenue earned from New Zealand and EBIT were in accordance with 1H18, accompanied by the rise in North Island activity offset by further deteriorations in South Island.
The stock of the company last traded on 4 March 2019 at A$0.550 without any further changes. Its market capitalisation is A$101. 96 million with approximately 185.38 million shares outstanding.
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