Baycorp Advantage warned shareholders of restructuring costs when its New Zealand and Australian components merged, the company said today in response to a "please explain" from the Australian Stock Exchange.
The ASX queried the company about several large writedowns which pushed its annual result well into the red.
Baycorp's loss for the
June year of A$299.9 million ($356.4 million) included a writedown of goodwill on consolidation (A$228 million) and writedown of its New Zealand databases (A$65.6 million).
Baycorp shares, which have lost 10 per cent of their value since Friday and were trading above $7 in December, were down 15c today at $3.80 albeit on very light volume.
Sam Macdonald of broker DF Mainland said Baycorp had been punished by Australian investors because of its result.
"I'd say Baycorp's in for another rough day. People, particularly Australian investors, are not responding well at all to these writedowns," Mr Macdonald said.
"The market's been a bit ruthless and it will continue to be ruthless with that one."
The loss compared with a profit on paper of A$18.78 million the previous year.
"The expectation of the restructuring and integration costs and goodwill amortisation was disclosed in the merger information memorandum provided to all shareholders," the company said in its response.
The board discussed the writedowns on August 29, and made its decision on September 2 before the results were released.
Baycorp Advantage was created through the merger in December of New Zealand's Baycorp Holdings and Australian associate Data Advantage.
- NZPA
