Metro Glass announces strategic review, reiterates guidance

Metro Performance Glass chairman Sir John Goulter.

Metro Performance Glass will put its business under the microscope as the glass products maker's management faces blowback from shareholders unhappy with their ability to grow earnings.

Auckland-based Metro Glass said it will carry out a strategic review of all aspects of its business while trimming forecast capital expenditure for the current financial year by as much as a fifth.

"The strategic review will assess the company's present strategy, longer-term market assumptions, and how the group's business model should be tailored accordingly," chair Sir John Goulter in a statement.

The review was sparked by "significant variations" in the timing of both residential and commercial work put in place in New Zealand between Metro Glass's assumptions and the actual market, he said. The company expects the review to be completed by March 2018.

The share price fell to a record low earlier this month and has been under pressure after the company warned dwindling work in Canterbury and Wellington would weigh on annual earnings, followed by a second steep drop in August on a flat outlook for the first half, despite owning Australian Glass Group for the entire six-month period. The share rose 1 per cent to $1.03, having dropped 47 per cent so far this year.

Today, Metro Glass said first-half net profit and earnings before interest, tax, depreciation and amortisation to September 30 was similar to the same period last year. The company reported a first-half profit of $11.5 million last year. It will release its first-half result on November 27.

It also said, however, it continues to anticipate improved full-year results. Metro Glass delivered a $19.4m net profit for the year to March 31.

The Auckland-based company said it now expects its capital expenditure to be "in the vicinity" of $20m in the year to March 31 versus a prior forecast of up to $25m. It expects to maintain both net debt and dividend payments to shareholders in the current financial year in line with the prior year. Net debt as at September 30 was slightly lower than the $95.4m reported as at March 31.