Crane releases accounts early, sees higher earnings

Fletcher is trying to take over Crane Group, which says it expects interim profits to rise by 17pc.

Crane Group, the Australian building supplies company New Zealand's Fletcher Building is trying to take over, says its interim net profit will be up 17 per cent on last year.

The company also said that the rebuilding of areas of Australia devastated by floods should boost sales of civil products, plumbing products and bathroom fixtures and fittings.

The company is paying an interim dividend of 22 Australian cents a share, which is up 4 cents per share on last year. The record date for the dividend is February 14 and the dividend is payable on February 22.

The numbers the company released today are based on unaudited management accounts.

They gave the company confidence to predict that net profit after tax for the full-year will be up 5 per cent and annual earnings before interest and tax will be up 15 per cent.

The audited accounts for the six months to December 31 are due to be published on January 28.

Crane Group has rejected Fletcher Building's cash and scrip offer, which is worth A$9.35 a share. Fletcher Building argues that it will manage the company better.

Interim earnings before interest and tax would be up 29 per cent, Crane Group said. Excluding the contribution of recently acquired Hudson Building Supplies they would be up 26 per cent.

"The benefit of the considerable work undertaken over the past two years to improve the underlying performance of our businesses is now being seen," Crane chief executive officer Greg Sedgwick said.

"Material improvements in earnings are being recorded as demand in a number of customer market segments begins to improve."

The company said it expected its net profit after tax and before significant items to be A$21 million for the half year, up 17 per cent on last year, ended 31 December, 2010.

The result includes two months of earnings from the Hudson Building Supplies.

Earnings before interest and tax (Ebit) were expected to be A$39 million, up 29 per cent on the previous corresponding period. Excluding Hudson Ebit was up 26 per cent.

Revenue was up 6 per cent and excluding Hudson revenue was up 4 per cent.

Commenting on the impact of the floods, Crane Group said the majority of the company's stores and facilities in flood regions suffered no damage and those few where a degree of inundation has occurred are expected to be fully operational within one to two weeks.

The New Zealand Commerce Commission said this week that it sees the manufacture and supply of pipes and pipe systems as the main area of overlap in this country between Fletcher Building and its takeover target Crane Group.

- NZPA