Metro Glass net profit falls below guidance

AUCKLAND: Metro Performance Glass said its fullyear normalised net profit was $18 million to $18.5 million, on the back of a weakerthanexpected Australian performance, as well as some unexpected costs related to a change in leadership.

The Aucklandbased company had previously forecast profit of $18.5 million to $20 million in the year to March 31 versus the previous year’s $21.3 million. Australia’s performance was hurt by the ‘‘longer than anticipated disruption from the capital programme’’ across the Tasman, it said.

‘‘The New Zealand programme went largely to plan. However, the Australian programme proved challenging,’’ the company said.

Australian Glass Group had to work around significant shipping disruptions delaying some key equipment beyond the planned shutdown period. This affected its sales, costs and customer experience in December, January and February, it said.

The programme is now complete and will provide ‘‘significant capability enhancements, plant simplification and better geographic alignment of equipment to market opportunities at the group’s seven processing plants’’.

Metro Glass also said it had some onetime abnormal costs affecting reported net profit relating to the change in the chief executive that were not anticipated. It is forecasting reported net profit will be $16 million to $16.5 million versus a net profit of $19.4 million in the previous year. In midDecember the company said chief executive Nigel Rigby was stepping down after five years, saying ‘‘the time is right’’ for new leadership. An international recruitment process is under way and in the interim, the group will be lead by the senior leadership team with close support from the board, it said.

Looking ahead, chairman Peter Griffiths said a strategic review announced in October 2017 is ‘‘well progressed.’’

After strong sales growth over several years, ‘‘we expect that activity in our core New Zealand market will remain flat and may eventually soften’’, said, while the southeast Australian market continues to show strong demand. Metro Glass has the capacity for increased sales in the southeast of Australian and intends to achieve ‘‘material profitable growth over there over the next 24 months’’, he said. In New Zealand, it will focus on becoming ‘‘more efficient and productive’’.

Mr Griffiths said Metro Glass would provide more detail on the results of the review when it announces its fullyear result on May 24. — BusinessDesk