KEY POINTS:
Shares in Auckland-based Nuplex Industries took a wee knock today, even as the company's boss was welcoming a strong performance during the past 18 months.
The share price slipped back today, at one point being down 25c, after hitting a record of $6.85 yesterday. In May 2005 they were in a trough at below $3.50.
Today's easing came after Nuplex announced its Australian subsidiary Nuplex Industries (Aust) Pty Ltd had agreed to pay A$20.3 million ($23.7m) for the composites business of Huntsman Chemical Company Australia Pty Ltd.
A further amount is payable if earnings targets are hit during the next three years.
The Huntsman announcement came out shortly before Nuplex held its annual meeting in Auckland.
In his address to that meeting managing director John Hirst said the market's understanding of the Nuplex's strategy and opportunities was improving steadily.
That was leading to a more appropriate valuation of the company's worth, as reflected in the share price.
Awareness had also increased across the Tasman, leading to significant Australian investment on the register, Mr Hirst said.
Nuplex's activities include manufacturing and distributing resins and polymers for use in the paint, ink, adhesive, fibre-reinforced, paper and textile industries.
Three resin represent 80 per cent of group business. They manufacture in this country, Australia, Vietnam, Malaysia, Indonesia, China, the Netherlands, Britain, Brazil and the United States.
Today Mr Hirst said business conditions this year had been difficult, and remained so but were expected to ease during the year to enable a strong finish.
Should the expected business conditions prevail, Nuplex was sticking to its previous guidance for ebitda (earnings before interest, tax, depreciation and amortisation) of between $103m -- equal to last year -- to $111m.
Nuplex group general manager Rob Harmsen said the past year was challenging for the resins businesses.
"We still have some underperforming entities, but plans to improve each situation have been developed and implemented," he said.
The opening of an innovation centre in the Netherlands created new opportunities for fundamental research and for helping market-driven product developments, Mr Harmsen said.
Group general manager for operations Tony Cooke said that improving plant efficiencies would remain a constant focus.
That was happening as the company moved to offset inflationary increases in operating costs, in an environment where gross margins were increasing at less than the consumer price index.
"Looking forward, we envision significant changes to our operations in all mature businesses, as we face the reality of increasing operating costs in a flat market," Mr Cooke said.
By mid-afternoon today Nuplex shares had made a partial recovery for the day to be down 10c at $6.70.
- NZPA
