Covid-hit Metroglass back in black, sees dividend in 2022

Covid-hit Metro Performance Glass said an improved performance in New Zealand and Australia drove its net profit back into the black in the March year, and that it planned to resume paying dividends in 2022.

The company last year struck a deal with its banks not to pay dividends in 2021, in return for a relaxation of its debt covenants.

In today’s result, the glass supplier and manufacturer’s net profit came to $8.5m from a loss of $78.9m in the previous corresponding period.

Before significant items, the net profit came to $7.9m, down 20 per cent from $9.9m a year earlier.

Metroglass’ earnings before interest and tax fell by 18 per cent to $17.9m – close to the top of the company’s forecast range of $16.5m to $18.0m.

Chief executive Simon Mander said business had endured disruptive operating conditions.

“In New Zealand we started the financial year in an alert level 4 lockdown, but recovered well, achieving good volumes in our Retrofit, and commercial glazing segments.”

Activity in those segments and a focus on cost control helped to offset the impacts of the level 4 lockdown in New Zealand and increased competitor capacity in the residential window manufacturer segment.

“In Australia, the business continued its positive trajectory with stable operating performance, positive customer feedback and growth in double glazing sales,” he said.

Group revenue for the year to 31 March 2021 of $232.3m was 9 per cent below last year, with New Zealand down 11 per cent and Australia up 1 per cent.

Net debt fell by $18.9m to $48m through strong operating cash generation, focused capital expenditure and the sale and lease back of the majority of the New Zealand vehicle fleet.

“Our operating environment has evolved in 2021 with the risk stemming from Covid-19 ever present,” Mander said.

In New Zealand, Metroglass’ operations were regularly impacted by fluctuating Covid-19 restrictions and international supply chain disruptions year, which affected momentum across the industry.

“With the unprecedented operational disruptions and competitive landscape changes faced in 2021 now largely behind us, the business is firmly focused on the future,” Mander said.

In today’s result, Metroglass said it expects to pay fully imputed dividends of between 50 per cent and 70 per cent of net profit after tax and before significant items at its first half, 2022 result.

In its earnings outlook, it said residential dwelling consents in New Zealand have remained elevated, despite the pandemic, supporting a healthy pipeline of work.

However, capacity constraints across the wider construction industry may limit growth in the near term.

“We are increasingly confident that activity across both New Zealand and Australia will be at least sustained at current levels for the rest of the 2021 calendar year,” Mander said.

“However, we remain alert to Covid-19 risks and the significant disruptions in international shipping, both of which are likely to continue until the end of 2021.”

Shares in Metroglass last traded at 39c, having gained 143.75 per cent over the last 12 months.

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