Alesco expects 29% fall in 1H profit
Alesco Corporation Limited (ALS) forecast a 29% drop in half year EBITA compared to the previous corresponding period based on preliminary unaudited management accounts. The company said it is expecting EBITA to total $30 million at the end of the six-month period.
Alesco said the comparison excludes the contribution from the Scientific & Medical division, which was sold on 30 April 2009.
The company said earnings per share before amortisation and significant items is expected to be approximately 16.5c, while full-year EPS is expected to be in the range of 34c to 36c based on the above mentioned first half performance.
Alesco said revenue from the continuing businesses for the first half of FY10 was down approximately 15% as lower volumes, pricing pressures and the volatility of the Australian dollar against other currencies impacting margins.
However, the company said trading results from the continuing businesses in the first half of FY10 were ahead of the second half FY09, with revenue up by approximately 7% and EBITA up by approximately 15%.
Alesco said net debt had been reduced from $159.7 million to $138 million, while gearing at 30 November 2009 is expected to be about 20%.
CEO, Justin Ryan, said sales were well down on the prior corresponding period, as the Australian and New Zealand housing and construction markets continued to soften.
“However, trading in the second quarter of FY10 was significantly better than the first quarter with sales up by approximately 10%, quarter on quarter,” Mr Ryan said.
”In addition, EBITA more than doubled in the second quarter, reflecting the seasonality of the business, an improved contribution from the Water Products & Services division and the benefits from the appreciating Australian dollar.”
Mr Ryan said there are encouraging signs of a market recovery with housing and loan approvals increasing.
”However, activity levels in the broader construction and infrastructure markets remain subdued, with a significant decline in new private sector projects,” he said.
“Government stimulus spending will provide some buffer against this decline in activity. However, the benefits of this spending are not expected to flow through until later in calendar 2010.”
As at 1042 AEDT, Alesco shares were down 31c to $4.61.
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