MetroGlass expects profit to miss forecast
By Suze Metherell
Metro Performance Glass expects first-half profit to be below its prospectus forecast as capacity constraints in New Zealand's construction industry weigh on the country's largest glass processor.
Profit will be between $10 million and $11M in the six months ending September 30, below its July 2014 prospectus forecast for profit of $12.1M, chairman John Goulter told shareholders at its first annual meeting since floating on the NZX last July.
Sales will be in line with its prospectus forecast of $94.1M.
The company also said 2016 annual profit will be between $20M and $22M in the year ending March 31, on sales of $190M.
In May, MetroGlass reported profit of $9.6M in the eight months ended March, on $115M in sales, after acquiring Metroglass Holdings before its initial public offering last year.
New Zealand building consents are at record highs, driven by a shortage of houses in Auckland and the Christchurch rebuild, with actual work underpinned by residential construction.
Still, MetroGlass, which has more than half of New Zealand's glass processing market, expects capacity constraints in the building industry to keep a lid on sales.
"Industry capacity constraints have led us to believe the current building cycle will last longer but have a lower peak than was anticipated last year at the time of IPO," Mr Goulter told shareholders in speech notes published on the NZX.
"This changed landscape and its associated delays to both residential and commercial projects are having an impact on our short-term financial performance. That notwithstanding, we are cautiously optimistic."
The company will focus on customer service to keep market share and lift growth, while also investing in building capacity.
Mr Goulter said he could understand that investors were "disappointed with the recent performance of our share price", with the stock having dropped as low as $1.30 earlier this week, below the $1.70 offer price last July when it raised $244.2M.
The stock reached a high of $2.03 in October, and rose 0.8 percent to $1.35 in trading today.