By NZPA
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Tuesday 12th November 2002 |
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Baycorp shares lost 85c to $2.40 shortly after the market opened, compared with the end of last year when the stock peaked at $7.70.
The company said after the New Zealand market closed yesterday that it expected only minor growth in earnings per share (EPS) in the 2002/03 financial year, with the benefits of a 2001 merger only flowing through in later years.
Baycorp Advantage was created in 2001 from a merger of New Zealand's Baycorp Holdings Ltd and Australia's Data Advantage Ltd.
"EPS before significant items and goodwill amortisation for the year ended June 2003 is expected to show little growth over the last year with the real benefits expected to flow in 2003/04 and 2004/05," Baycorp said in a statement to the New Zealand and Australian stock exchanges.
Salomon Smith Barney broker Craig Robins said Baycorp was still viewed with scepticism.
"There are issues there -- transparency, debt levels, acquisitions and quality of earnings. So it's still on a relatively high (P/E or price to earnings) multiple," Mr Robins said.
Baycorp has been punished this year after booking a June-year loss of $A299.9 million ($NZ344.4 million), following a $A228 million writedown of goodwill after the merger.
The company said yesterday a $A10 million payout to settle litigation against the former Data Advantage would be booked as an expense, and as a significant item, in the six months to December 31 result.
Baycorp said half-year revenues would be 12-15 percent above last year's, on a pro forma basis, while full year revenues would be 15-20 percent higher.
In September, Baycorp said it was on target to achieve annual growth in earnings before interest, tax depreciation and amortisation of 20 percent, before benefits from the merger were counted.
Baycorp has revised that growth down to 0-6 percent as a result of higher operating costs in the first half of the year.
The cost overruns related to delays in reducing the overhead costs following the merger. However, the company said the promised integration benefits of $A15 million annually, within three years of the merger, remained on track.
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