Horizon Energy blames takeover costs for profit downgrade

Tuesday 5th October 2010

Horizon Energy, the twice takeover target of Marlborough Lines, downgraded its first-half profit by at least $1.5 million, blaming legal fees from the first failed acquisition attempt and falling interest rates.

Horizon reported a full-year profit of $5.9 million in the year ended March 31.

The lines company didn’t include a cost for the Marlborough offer, though chairman Rob Tait told shareholders at the August annual meeting they’d already run up $800,000 in lawyers’ fees defending proceedings taken by the rival outfit.

That’s on top of the reduction in value of its interest rate derivative instruments will knock $700,000 from net profit in the six months ended September 30.

Tait said the underlying performance and profitability was in line with market expectations, and if interest rates rise in the second half, those losses may be recovered.

The shares were unchanged at $3.62 in trading today, and have gained 19% this year. Marlborough Lines succeeded in securing 14% ownership of Horizon in its second bid in August, when it offered $4.06 a share.

Businesswire.co.nz

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