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Mercer narrows first-half loss

NZ Newswire logoNZ Newswire 27/02/2017 Sophie Boot

Mercer Group, the stainless steel fabricator, posted a $2.6 million loss in the first half, but said it's anticipating a return to positive pre-tax earnings for the second half despite the "disappointing" start.

The $2.6m net loss was smaller than $4.7m from the six months to December 2015, though revenue fell 19 per cent to $7.9m in the latest period. Earnings before interest, tax, depreciation and amortisation (ebitda) was a $1.5m loss, although stripping out costs for its capital raising, acquisition, restructuring and discontinued items slimmed that down to a normalised ebitda loss of $715,000.

"This is a positive step forward following the extensive strategic review, the restructuring carried out over the past 18 months and the acquisition of Haden & Custance," the company said.

The company said it's focused on improving operating performance and the commercialisation of its S-Clave sterilisation technology.

Christchurch-based Mercer issued 130.8 million new shares at 1 cent each to fund its purchase of the assets and business of Hastings-based Haden & Custance in December last year.

The $2.25 million deal added a robotics system used to prepare bulk products such as cheese and butter for processing, and offices in Melbourne, Australia, and Wisconsin in the US.

It raised $7m through an underwritten rights issue in 2016, used to repay debt and provide the firm with working capital, though the H&C acquisition needed new funding.

The company wants to reposition the steel business's focus to food processing and packaging technology, giving it exposure to higher-value export business.

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