Guidance downgraded

AUCKLAND: Metro Performance Glass’ shares dropped 4.8% after the company yesterday downgraded its guidance at its annual shareholders’ meeting due to weakness at its Australian division.

According to its presentation filed to the NZX, Metro Glass expects group earnings before interest and tax in the 2019 financial year to be at the lower end of its target range of $30 million to $33 million, ‘‘as a result of weak yeartodate results in Australia following a period of significant change’’.

The shares recently dropped 4c to 80c and have fallen 16% this year.

The company said its financial performance in New Zealand was ‘‘on target and ahead of the same period last year’’ but ‘‘unfortunately Australia is not in the same position’’.

‘‘Our recent capital investment programme, related equipment commissioning and the opening of the new Tasmanian plant highligh ted gaps in organisational capability,’’ the company said.

‘‘Service levels are now improving and we’re focused on building the required capabilities to achieve better returns, however as we’ve observed in New Zealand this will take time.’’

Metro Glass said it would provide a further update with its halfyear results in November.

In May, the company reported fullyear profit for the year to March 31 fell 16% to $16.3 million because of softer growth in New Zealand and capital programme disruptions in Australia. Sales rose 10% to $268.3 million, including 12 months of trading from Australian Glass Group.

AGG’s profitability was below expectations in 2017 due to the longer than anticipated disruption from the capital programme and ongoing poor machine reliability in the Sydney plant, but Metro Glass said this had been addressed and its outlook was for significant growth opportunities. — BusinessDesk