Mercer turns to 1H loss   26 Feb 2015

Mercer turns to 1H loss after year earlier licence sale washes through

By Paul McBeth

Feb. 26 (BusinessDesk) - Mercer Group, the stainless steel fabricator and manufacturer, reported a first-half loss after the sale of an S-Clave licence a year earlier washed through, and the company expects to lift profitability in the full year.

The Auckland-based company reported a net loss of $23,000, or 0.01 cents per share, in the six months ended Dec. 31 from a profit of $407,000, or 0.16 cents, a year earlier, it said in a statement. The 2013 first-half result was bolstered by earnings of $800,000 from the license sale which wasn't repeated in the latest period. Earnings before interest, tax, depreciation and amortisation fell 33 percent to $746,000 while revenue grew 7 percent to $22.9 million.

"The directors believe the company is on track to meet the objectives it has set for the financial year and continues to build a strong and sustainable business that is on a good growth trajectory," chief executive Rodger Shepherd said.

At its annual meeting in December, the company targeted revenue growth of 10 percent for the 2015 financial year, an increase in profitability, fewer injuries, at least $3 million of headroom in its banking facility and sales of least 12 Titan 500 slicers in the year. Mercer today said it was on track to meet those five targets.

Sales for its steel fabrication division rose 21 percent to $16.9 million, helping Ebitda to almost double to $1.24 million. Its interiors division reported a 12 percent drop in revenue to $4.12 million, while lifting earnings to $90,000 from $64,000 a year earlier.

The medical division posted an Ebitda loss of $83,000 compared to a positive Ebitda of $97,000 in 2013, while sales fell 3.8 percent to $1.76 million.

Mercer narrowed its operational cash outflow to $235,000 in the period from $1.1 million a year earlier, though had a negative cash position of $620,000 as at Dec. 31. Its borrowings of $5.9 million with the negative cash position, meant net debt to equity was a ratio of 30 percent, up slightly from 29.7 percent a year earlier.

The company announced the result after the close of trading. Mercer's shares were unchanged at 18.5 cents, and have declined 7.5 percent this year.

(BusinessDesk)

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