MGL
29/08/2013 10:01
FLLYR
REL: 1001 HRS Mercer Group Limited
FLLYR: MGL: Mercer reports strong progress in 2013
NEWS RELEASE dated 29th August 2013
Mercer reports strong progress in 2013
Mercer Group has made strong progress in 2013 with an audited reported
trading profit (EBITDA) of $2.5m for the full year and a Net Profit after Tax
of $0.8m. This is at the top end of the previous market guidance, and
significantly up on last year's reported EBITDA of $0.1m.
Highlights of the year include:
- Revenue growth of $5.5m versus the 2012 year.
- EBITDA of $2.5m versus $0.1m in 2012 (2012 normalised EBITDA was $1m).
- Balance Sheet Equity growth of $0.8m.
- New Banking facility in place to fund Titan acquisition and other growth
projects.
- Good progress on S-Clave development.
- Improving safety with LTIFR reducing to 7 for the full year versus 31 for
prior year.
Stainless Division
This division comprises the fabrication workshops in Christchurch and New
Plymouth, an operation in Nelson and a branch in Brisbane, Australia. The
division is a fabricator and manufacturer of equipment, predominantly in
stainless steel for the food industry. The acquisition of Titan Slicers sits
in this division.
The business had a strong year with the largest projects being the sale of
four slicing lines to Maple Leaf Foods (MLF) in Canada, the Fonterra Darfield
Stage 2 construction via GEA, and a cheese hall upgrade at Open Country. The
Stainless division has reported sales revenue of $28.1m, some $7.0m higher
than last year. The Segment EBITDA was $3.2m compared to $1.0m last year.
The current order book is strong with good workloads through until next
February. We have strong forward orders of Aico Packaging equipment into
Australia in particular, and have successfully secured a good amount of the
Oceania Dairy - Yili project. We also have some Titan machine builds
underway, and with MLF now successfully installed we are moving the focus
back onto sales, particularly in North America.
Interiors Division
This division manufactures in New Zealand and supplies sinks, basins, tubs,
toilets, laminate, solid surface material and other similar products to
joiners, merchants, fabricators and other manufacturers in New Zealand and
Australia. Mercer sells the Wilsonart brand of laminate in the NZ market.
The New Zealand business had growth in 2013 versus prior year, and we expect
further growth to occur in FY14 as the economy continues to lift, Mercer
improves its sales capability, and the Company launches its new tight radius
pressed sinkware range.
In Australia, Mercer had a difficult year, but we are pleased to have signed
a new primary distributor - Argent Australia Pty Ltd, that commenced in early
August.
Overall the segment EBITDA was $0.3m, up from breakeven last year.
Medical Division
Mercer Medical is a division supplying equipment and related products and
services for sterilization, washing and disinfection. As discussed at the
half-year, Mercer has successfully introduced MMM equipment into NZ and has
lifted earnings in the second half as a result. Segment EBITDA was $0.2m for
2013.
Mercer Technologies (R&D)
Mercer is close to finalizing a license agreement for its S-Clave technology
with a large multinational company for the North American market. This
follows an intense due diligence process that was recently signed off by the
prospective Licensee. We will make a further announcement when the terms
have been finalized and the agreement is signed.
Dividends
The Directors have decided not to declare a dividend this year.
Outlook
After the restructuring and repositioning of the Company in 2012, we focused
on improving operating performance in 2013 and selectively investing in key
areas for profitable growth in 2014 and beyond. In particular, Mercer
purchased Titan Slicer and has invested around $2m into this initiative for
the acquisition and then working capital. Mercer has also invested close to
$0.7m in the S-Clave in the past 12 months and has reviewed a number of other
acquisition opportunities.
This coming year, Mercer is anticipating improved earnings over 2013 and a
reduced level of capital and IP expenditure. New equity is likely to be
introduced from the warrants on issue. These factors should result in a
strong cash inflow that Mercer can use to repay debt and continue to search
for appropriate acquisitions.
For further information, please contact Rodger Shepherd, CEO on +649 837 7540
End CA:00240384 For:MGL Type:FLLYR Time:2013-08-29 10:01:43