MGL
29/08/2012 09:10
FLLYR
REL: 0910 HRS Mercer Group Limited
FLLYR: MGL: Mercer Group L:imited Full Year Result to 30 June 2012
August 29, 2012
News Release
Mercer back in black
Mercer generated a profit in the six months to 30th June 2012 and is
forecasting strong profit growth for the year ending 30th June 2013.
The unaudited results for the full year to 30th June 2012 show the following:
$1.0m loss for the year, comprising a loss of $1.1m in the first half and a
profit of $0.1m in the second half.
EBITDA (operating earnings before interest, tax, depreciation and
amortisation) from the on-going business for the year of $1.2m against a
target of $1.0m (excluding abnormals).
Positive cash flows from operations and investing activities of $1.5m after
capital expenditure of $0.5m and interest costs of $0.4m.
Shareholders' equity of $16.4m.
Chief Executive Rodger Shepherd says "the company has substantially completed
its restructuring and is now concentrating on continuous improvement in its
operating divisions as well as searching for adjacent growth opportunities.
In July we acquired 75% of Titan Slicers, a designer and manufacturer of
world leading industrial slicing equipment. Titan is close to finalising a
substantial order from a large North American food manufacturer which will
have a positive impact on our bottom line".
During the last six months, Mercer has been rebranded and its financial
systems upgraded. Offices and distribution centres in the North Island have
been moved to new headquarters in Onehunga, Auckland.
Mercer believes its EBITDA for the financial year ended June 30th, 2013
should be in the range of $3 - 4m. The company is forecasting capital
expenditure of $0.7m and interest expense of $0.3m for the period.
DIVISIONAL PERFORMANCE:
The following table illustrates the improvement in performance against 2011
and the improvement in the second half of the year against the first half:
$ Millions
(please see attached pdf for full details)
Stainless Division
The Stainless division comprises fabrication workshops in Christchurch, New
Plymouth and a branch in Brisbane.
The business had a solid year with the Fonterra dairy plant in Darfield
providing the backbone of work together with the greenfield Guardians
Balclutha plant, a Primo conveyer project in Australia and a large Acid tower
for Ravensdown.
Mercer has retained a sales and project management office in Australia that
is sourcing opportunities for our NZ workshops.
The current Stainless order book is strong with Mercer successfully signing
up further work for Stage 2 of the Fonterra plant at Darfield. With
continued growth in sales of Mercer owned equipment and with the Titan
forward order book looking strong, we expect this division to produce an
improved result in the year ending 30th June 2013.
Interiors Division
The Interiors division manufactures sinks in Christchurch and supplies
imported sinks, basins, tubs, toilets, laminate, solid surface material and
other similar products to joiners, merchants, fabricators and other
manufacturers in New Zealand. During the period, Mercer was successful in
attaining representation for Wilsonart laminates, which is one of the largest
laminate producers in the world. This is proving to be complementary to our
sinkware offering.
The New Zealand business continues to be affected by the downturn in
residential building activity and delays in the Christchurch rebuild. We
recruited a new General Manager, to lead the change needed in this division,
and progress is being made.
In Australia, Mercer signed a distribution agreement with Bathroom and
Kitchen Supplies Pty Ltd (trading as Imperialware). Mercer is finding
Australia a tough market to penetrate but we continue to believe there is an
opportunity to market our high quality NZ manufactured product in this
market.
We are forecasting sales in this division to increase next year, as a result
of the Wilsonart representation and some growth in the NZ building sector,
particularly in Christchurch.
Medical Division
Mercer Medical is a division supplying equipment and related products and
services for sterilisation, washing and disinfection. During the year Mercer
signed new distribution agreements with leading overseas principals,
including MMM Group, BHT and Dr Weigert. We have developed more focus on our
servicing capability, which is now the backbone of this division, along with
selling consumables.
FUNDING AND CASH FLOW:
During the year the company successfully negotiated new bank facilities with
BNZ, and is now covenant compliant. Rodger Shepherd exercised $1m of his
options. These funds were used to strengthen the company's working capital
position. All shareholder loans have been repaid and bank debt is being
reduced by $50,000 per month.
The following chart shows the flow of cash against debt balances and
highlights the improving net debt position.
$ Millions
(please see attached pdf for full details)
DIVIDEND:
The Directors have determined that it is not appropriate to pay a dividend
this year.
Garry Diack Rodger Shepherd
Chairman CEO
For further information, please contact Rodger Shepherd, Group CEO on +649
836 9778
End CA:00226598 For:MGL Type:FLLYR Time:2012-08-29 09:10:43
