Mercer annual earnings fall after Titan slicers miss sales targets

Mercer Group [MGL] annual earnings fell after the stainless steel fabricator and manufacturer sold less of its Titan 500 slicers than it expected.

Earnings before interest, tax, depreciation and amortisation were between $600,000 and $800,000 in the year ended June 30, the Auckland-based company said in a statement. That's down from Ebitda of $1 million the year earlier and means the company didn't meet its forecast for earnings growth. It said it was on track to meet its target for revenue growth of at least 10 percent.

Mercer missed its target for at least 12 Titan 500 slicer sales, making only eight sales during the year. It has been expanding its workforce to build and manufacture the industrial food slicers after acquiring the Nelson-based business in 2012.

"This shortfall has had a knock on effect such that the company will not meet the guidance," Mercer said. "Developing those products and markets has taken considerable resources and while it is disappointing that the company has not achieved its targeted sales numbers, its momentum is positive."

The company said it didn't meet its target for at least $3 million of headroom in its banking facility at the June 30 end of the financial year. However, it said Bank of New Zealand agreed to waive the covenants and "remains supportive" of the company.

To help grow the Titan division, the company has established a working capital facility with Gresham Finance, which is owned by interests associated with director and shareholder Humphry Rolleston.

Government funded Callaghan Innovation will continue to provide funding for its S-Clave sterilisation system after it achieved set milestones during the year, it said.

Separately, the company said director Richard Rookes would take over as chief executive from Rodger Shepherd, who announced his departure in April. Rookes is a manager of the Rakaia Fund, which is a shareholder in Mercer.

Tobin Blathwayt will step down as chief financial officer on August 31 to become chief operating officer, it said.

Shares of Mercer last traded at 10 cents, and have slumped 50 percent this year.

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