Owens downgrades forecast

By DANIEL RIORDAN

A tougher than expected six months has caused Owens Group to downgrade its operating profit forecast for the March year and it says it is unlikely to better last year's $4.9 million.

The group's share price fell 15c to $1.20 on yesterday's news.

"Recent trading factors had affected the second-half result and our best current estimate is that we will maintain our operating profit after taxes at a similar level to last year for the full year to 31 March 2002," chief executive David Ritchie said.

"We are acting decisively to overcome issues that have been identified and are moving forward positively into the new financial year. Given the trading conditions experienced, the forecast outcome for the current year can be considered satisfactory."

Owens made a bottom-line profit of $4.6 million for the last March year, and $2.6 million in the six months to September 30.

Ritchie said factors influencing Owens' current performance included:

* A weak international economy.

* Below-par economic conditions in the New Zealand market.

* Unusual weather affecting exports of perishable products such as cherries, strawberries and asparagus.

* Excellent grass growing conditions that have delayed sheep, lamb and beef kill volumes, affecting the group's rural transport and exports.

* Delays in the rationalisation of Owens' freight forwarding activities in Australia.

* Increased competition in Australia and NZ in both container services and road transport.

* The impact of the September 11 terrorist attacks on securing air freight capacity and higher airline charges.

Ritchie said a number of business units were trading well, led by Hirepool. Hyde Park, Owens Tankers, AFL Freight Forwarding and Ships Agency had also performed well.

Looking ahead, Ritchie said changes in the shipping industry internationally would present Owens Ships Agency with challenges, although a new cool storage terminal at Melbourne Airport would help the group.

Owens recently appointed Clive Barrett as group general manager logistics Australia, which Richie said would strengthen the Australian management team in what is a crucial growth market.