Metro Performance Glass's tumbling share price has hit state-owned funds in particular with the New Zealand Superannuation Fund and ACC feeling the pain as the company's top two shareholders.
Metro Glass shares nosedived after its first half profit slid 22 per cent; the board cancelled dividend payments and downgraded profit expectations for the full year.
The stock closed down 25 per cent at 40 cents on the NZX following a similar big fall last week when it revealed a competitor was entering the market.
The company's market capitalisation has shrunk to just $74 million from $178m a year ago and $345m when it floated on the NZX in 2014.
The NZ Super Fund is the company's biggest shareholder with 7.36 per cent while the ACC holds 5.9 per cent.
While clearly disappointing, Metro Glass is a tiny investment relative to the Super Fund's size and portfolio strength. At the current market price the shares held by the fund are worth about $5.4m.
The $40b fund returned 12.43 per cent in the year to June 30, beating its passive Reference Portfolio market benchmark by 2.02 percentage points and exceeding the average return on Treasury Bills by 10.71 percentage points.
A spokeswoman said the Super Fund's confidence in its active New Zealand listed equity strategy remained high.
"Of course, over time some investments have done well and others have not been successful – that is the nature of investing.
"As with all our investments in NZ listed companies we meet regularly with management, but have no further comment to make on the company."
Metro Glass said the weaker result and profit warning was largely due to poor trading results in Australia.
Chief financial officer John Fraser-Mackenzie acknowledged investor and media coverage was largely negative "but for us, we believe Metro is a good business and it has been a challenging time but we are well placed to grow. We would say we're leaders in the glass industry so we are producing cash, albeit not enough for everyone but we have no doubt that we will get there."
The company said it had been "impacted by poor trading results in Australia" which delivered an earnings loss of $1.3m.
Dividends have also been suspended, with the company saying it had reviewed the leverage and dividend policy. It considered a range of options which it said were in the best interests of the group to pay down debt so declare no further dividends.
Group revenue for the September 30, 2018 half-year was $140.5m compared to $141.7m in the 2017 half-year. Ebitda fell from $24.7m to $22.7m and net profit after tax fell from $11.8m to $91.m. Last year's total dividend for the half year was 3.6 cents per share but that spot was blank on this year's result summary. Net debt rose from $93.9m to $95.2m.
Simon Mander, the chief executive appointed in August, began on November 19.
Fraser-Mackenzie said although Australian conditions had been challenging, "we've been in Australia for two years and we believe the Australian market offers significant opportunity for us, particularly as their penetration of the double glazing in homes increases."
The company was downbeat in its guidance for the 2019 financial year: "The financial performance of New Zealand is on target and ahead of the same period last year.
However, Australia has not kept pace with expectations. Consequently, we now expected FY19 group Ebit of circa $28m," the company announced in its interim results presentation.
The previous guidance had been that the company would make $30m to $33m.
Metro Glass says it has more than 55 per cent of this country's flat glass market, according to its shareholder presentations, making it the market leader. Most revenue comes from the housing market: in 2018, $143.2m out of New Zealand revenue of $212.9m.
In the residential market, a major part of the company's business is supplying glass to independent window fabricators.
"The market doesn't believe the company anymore," one institutional expert said. "The guidance they have given also appears overly optimistic because the residential construction market appears to be showing signs of slowing."
Fraser-Mackenzie said the market should believe the company "particularly as we focus back to basics".