Mercer Group posted a wider loss as the cost of restructuring and foregone tax assets weighed on the bottom line.
The Christchurch-based company reported a net loss of $7 million, or 16.96 cents per share, in the year ended June 30, from a loss of $6.5m, or 39.15 cents, a year earlier, it said in a statement. The bottom line was weighed on by a $2.1m tax expense after the firm gave up tax assets during a $7m capital raise through a rights issue, which diluted the shares on issue and meant the earnings per share loss shrank.
On an earnings before interest, tax, depreciation and amortisation basis, Mercer's loss was $3.5m, compared to $3.2m a year earlier, although that included $2.2m of restructuring and impairment charges as 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. Revenue gained 3 per cent to $26.9m.
"While the annual result is not where we need or want it to be, the efforts of the past year have been focused on fundamental change to our operations and strategy," chair John Dennehy and chief executive Richard Rookes said. "We are forecasting a continuation of the improved operating performance for the 2018 financial year."
Mercer has overhauled its business over the past year and a half, raising equity to repay debt and replacing related party loans from Gresham Finance, a vehicle affiliated with majority shareholder Humphrey Rolleston, with a banking facility with Bank of New Zealand. Of the company's $7.7m of loans, $6.6m is due to BNZ.