Vertex finances under fire

Shares in recently listed plastics manufacturer Vertex have continued to slide after this week's profit warning, prompting a query from the New Zealand Stock Exchange.

The shares, which fell 9c yesterday to close at $1.29, have lost 31 per cent of their value since Monday.

The shares were issued at $2.05.

The exchange's market surveillance panel is investigating whether Vertex complied with listing rules relating to the supply of relevant information, after the company's announcement on Wednesday.

Vertex warned of a 15 per cent drop expected on the prospectus forecast of $5.2 million in earnings before interest and tax (ebit) for the six months to September 30.

It cut the full-year ebit forecast of $11.2 million by 10 per cent.

The NZSE has contacted the Securities Commission as the "announcement by Vertex may cast doubt upon the accuracy of the forecast financial information presented in the investment statement and prospectus dated June 7".

Vertex blamed poorer than expected sales and cost problems in its Hamilton-based Technical Injection business.

Richard Burton, of brokers Forsyth Barr Frater Williams, said confidence in the stock had been eroded.

"Vertex had a forecast that was above what its traditional businesses made in the past. It's the new part that they've been expanding into that hasn't performed.

"The problem is it's only a few months since the forecast was made.

"It will take one or two results showing improvement before the market trusts the company again.

"The other problem there is when you have a stock with 100 per cent free-float like Vertex, there's no major shareholder," Burton said.

"When all the shareholders want to get out at the same time it can mean the stock gets oversold."

Vertex emerged from Carter Holt Harvey's packaging business. The company's shares listed in July having raised $61 million.

- NZPA