CBL shares take a tumble after result

Shares in CBL Corp tumbled 11 per cent yesterday after the credit surety and financial risk insurance company posted full- year earnings that missed some market expectations and included one- time costs not projected in its prospectus.

Net profit fell to $ 30.7 million in the 2016 calendar year, from $ 35.5m a year earlier, the Auckland- based company said.

That fell short of the $ 40.4m forecast in its prospectus.

Operating earnings rose to $ 76.2m — exceeding its prospectus forecast of $ 63.6m — from $ 59.9m a year earlier. Revenue rose 36 per cent to $ 333.5m, also ahead of the company’s prospectus forecast.

Weighing on net profit were $ 4.2m of capital raising and business acquisition costs, finance costs of $ 6.7m and a foreign exchange adjustment of $ 9.7m. The shares declined 41c to $ 3.30, having climbed 50 per cent in the past 12 months.

“There were a few one- offs by the look of it, what they’re saying is the result’s not as bad as it maybe looks at first glance because they’re more focussed on the underlying profit,” said Mark Lister, head of private wealth research at Craigs Investment Partners.

“If you look at this time last year the shares weren’t too far above $ 2 and it put on a pretty stellar performance through most of last year so it’s possibly a case of expectations being a little high, and maybe the market wasn’t as happy with the numbers as the company was.”

CBL listed on the NZX in 2015, raising $ 90m to help fund the acquisition of Australia’s largest surety bond insurer Assetinsure, and has since acquired operations in the UK and in France.