Metro Glass share price falls on flat results prediction

Metro Performance Glass shares fell after the company said it expects its first-half results to be largely flat despite the contribution from recently acquired Australian Glass Group.

“Given the current conditions we are seeing in the market, we expect the group’s first-half results to be similar to those achieved in the first half last year, which was a particularly strong half,” said chairman John Goulter.

The stock dropped as low as $1.19, before eventually closing down 15c at $1.24.

The shares were sold at $1.70 apiece in an initial public offering to raise $244.2 million, the bulk of which went to its former private equity owners Crescent Capital and Anchorage Capital.

“Activity levels to date have been below our expectations and as we had resourced the business accordingly there will be a need to adapt and pursue efficiency initiatives through the second half of the year,” Goulter said.

The flat result comes despite the contribution from Australian Glass Group, an A$43.1m ($47.1m) acquisition it made in September last year. At the time of the deal, Metro Glass said it expected the Australian firm to boost earnings from the first year.

“The problem is that they have the acquisition in there . . . so to be flat on last year is disappointing,” said David Price, a broker at Forsyth Barr.

Goulter said the Auckland-based company continued to anticipate improved results in the 2018 year “but this will be dependent on any adverse changes in market conditions. We will further update investors with our expectations for the full year when we release our half-year results in November”, he said.

Metro Glass delivered a $19.4m net profit for the year to March 31, down from $21.3m a year earlier, as it absorbed the costs of the major acquisition in the Australian market, and the impact of declining building activity in Canterbury and a dip in Wellington activity after the Kaikoura earthquake last November.

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