Mercer first-half loss narrows as revenue more than doubles

Friday 16th February 2018

Mercer Group narrowed its first-half loss after more doubling revenue, but says its performance was still not where it needed to be with disappointing earnings in its robotic bulk foods handling division.

The Christchurch-based company reported a net loss of $370,000 in the six months ended Dec. 31, narrowing from a loss of $2.6 million a year earlier. Revenue rose to $16.4 million from $7.9 million a year earlier. Earnings before interest, tax, depreciation and amortisation were $96,000, turning from an ebitda loss of $1.5 million.

Last financial year, Mercer repositioned the business into what it now sees as a holding company for three separate businesses: automated and robotic bulk foods handling system Haden & Custance; the still-to-be-commercialised medical sterilisation technology unit S-Clave; and the traditional stainless steel fabricator Mercer Stainless.

"While the performance of the group is not where it needs to be, we are pleased to have recorded a positive group ebitda for the half year," the company said in a statement to the NZX. "We remain confident that Haden & Custance can generate profitable growth going forward through a greater focus on sales origination in market its markets."

The company said its stainless division lifted revenue 35 percent to $10.6 million with ebitda more than doubling to $1 million in the first half, while Haden & Custance sales momentum was slower than previously projected at $6.3 million producing an ebitda loss of $618,000.

"H&C provides us with a significant growth opportunity in the medium term and we are investing in the market and its operating platform to achieve this," the company said. "In the short term, the business has decent workflows that should result in a stronger second half of the financial year.

"We are still targeting having the S-Clave in market this financial year. While this will be a significant milestone for the group, its growth, if successful, will occur over the years ahead. Mercer Stainless has adequate workflows for the second half of the financial year but continues to operate in a competitive, cyclical environment."

The shares last traded at 46 cents, up 24 percent in the past year.

(BusinessDesk)

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