KEY POINTS:
Cavotec MSL Holdings, formerly Mooring Systems, says it is on track to achieve its year earnings target, and hopes to graduate to the NZSX-50 index this year.
The new company, formed by the merger Christchurch-based Mooring Systems and Dutch company Cavotec MSL Holdings last year, had flagged a
10 per cent compound growth in sales and after tax earnings year on year.
Executive chairman Stefan Widegren said that while the year was still in its infancy, indications were that the company would meet its target for the current year.
He said the merger had been the year's outstanding milestone, providing additional resources to help MSL market its systems globally, using Cavotec's marketing network.
"You as shareholders can now be comforted that the combined cash flow of Cavotec is more than sufficient to meet these needs," Mr Widegren said.
The company had now moved its head office to Lugano, Switzerland.
Four MoorMaster 600 units had been installed and commissioned in the Port of Salalah, Oman, a system had been installed in the St Lawrence Seaway in Canada, and the company hoped to be able to announce another sale in the near future.
For the first quarter, Mr Widegren said the business was "going from strength to strength".
The order book at the end of March stood at 41 million euro ($76.82 million) compared to 33.7 million euro ($63.14 million) at the end of December 2006.
Order intake for the quarter was 34.3 million euro ($64.26 million), which compared favourably with the company's budget.
To rise to the Top 50 on the New Zealand sharemarket, the company needed attain greater liquidity of shares and had made a placement of 4 million secondary shares at $4.45 this month, a discount of less than 6 per cent on the current trading price.
The shares sold were mainly held by executives and founding shareholders of Cavotec and MSL.
Cavotec has a dividend policy of 15 per cent on after-tax earnings this year.
Mr Widegren said the payout ratio might appear low but it was influenced by the need to preserve cashflow for anticipated growth, and enabled the dividends to be paid with imputation credits.
He also called for tax exemptions for New Zealand-registered companies earning "active income" overseas.
Recent changes to the tax laws had "substantially disadvantaged" Cavotec compared to its New Zealand peer group, and the law was "out of step" with most OECD countries and New Zealand's trading partners.
Cavotec shares were down 3c to $4.72 in early afternoon trading.
- NZPA
