CBL Corp shares tumbled 11 per cent after the credit surety and financial risk insurance company posted full-year earnings that missed some market expectations and included one-time costs that weren't projected in its prospectus.
Net profit fell to $30.7 million in the 2016 calendar year, from $35.5m a year earlier, the Auckland-based company said in a statement. That fell short of the $40.4m forecast in its prospectus. Operating earnings rose to $76.2m, exceeding its prospectus forecast of $63.6m, from $59.9m a year earlier. Revenue rose 36 per cent to $333.5m, also ahead of its prospectus forecast.
Weighing on net profit were $4.2m of capital raising and business acquisition costs, finance costs of $6.7m and a foreign exchange adjustment of $9.7m, the company's results show. The shares declined 41 cents to $3.30, having climbed 50 per cent in the past 12 months.
"There were a few one-offs by the look at it, what they're saying is the result's not as bad as it maybe looks at first glance because they're more focussed on the underlying profit," said Mark Lister, head of private wealth research at Craigs Investment Partners. "If you look at this time last year the shares weren't too far above $2 and it put on a pretty stellar performance through most of last year so it's possibly a case of expectations being a little high, and maybe the market wasn't as happy with the numbers as the company was."
CBL listed on the NZX in 2015, raising $90m to help fund the acquisition of Australia's largest surety bond insurer Assetinsure, and has since acquired UK tax investigation insurance provider Professional Fee Protection, and France's largest specialist producer of construction-sector insurance Securities and Financial Solutions Europe SA, continuing an international expansion strategy begun in 2000. Its debt increased to $96.9m at the end of 2016, from $65.2m in 2015, and it signalled that growth through acquisitions was likely to slow this year.
