Dexion, a manufacturer of industrial and office storage equipment, has delivered a drop in first-half profit and lowered its full-year guidance due to poor economic conditions in New Zealand.
Profit for the six months to June 30 fell 9.6 per cent on the same period in the previousyear to A$3.72 million, after one-off expenses relating to the expansion of the East Tamaki manufacturing plant in Auckland.
Normalised net profit - after one-off expenses and amortisation - climbed 22 per cent to A$5.3 million.
But Dexion cut its full-year normalised profit forecast to between A$12 million and A$13 million, from A$14 million, citing the slowing New Zealand economy and as it waits to see the impact of measures taken to improve the performance of its commercial division in the second half.
"The second-half result will be impacted by our ability to continue to drive improvements in the commercial division along with the slowing New Zealand environment and our ability to pass on higher input costs," said managing director Peter Farmakis.
"The results from our smaller commercial division were below expectations, and action has been taken to improve its performance in the second half."
Sales revenue for the half-year climbed 21 per cent to A$136.4 million, with the company declaring an interim dividend of A4c steady against the previous corresponding period.
Dexion said there had been strong revenue growth from its industrial division in Australia but sales in New Zealand and Asia were weaker than expected.
The company said the performance from its commercial division was "significantly below expectations".
Dexion said overheads from the commercial division were being reduced and further efficiency initiatives were planned for the second half.
