21/02/2014 - 15:22

Coventry Group warns of hard times ahead

21/02/2014 - 15:22

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Coventry Group warns of hard times ahead

Industrial parts and services provider Coventry Group has warned earnings growth will be slim in the second half of the financial year, after lodging a narrow net profit for the six months to December 31.

Coventry today said its net profit for the half year came in at $200,000, significantly down from the $4.2 million net profit recorded in the first half of the 2012-13 financial year.

Revenue was down 12.8 per cent to $107.9 million.

Coventry will nonetheless pay an interim dividend of 11 cents per share, fully franked.

The company’s fasteners division rebounded from a $500,000 loss in the previous corresponding half year to lodge a $400,000 earnings before interest and tax result, while Coventry’s gaskets business lodged a pre-tax profit of $1.2 million.

Sales in Coventry’s hardware business declined by 16.9 per cent to $10 million, to record a pre-tax loss of $900,000, after a $500,000 pre-tax loss in the prior corresponding half year.

Coventry’s Cooper Fluid Systems business was also hit hard, with sales falling by 28 per cent to $30.4 million, to record a pre-tax profit of $600,000, down 89 per cent on the previous corresponding six months.

Overall staff numbers fell from 825 at December 31 2012 to 769 at the end of last year.

Coventry said the main driver behind the falling profits was the transition of the mining sector from construction to production, operations and maintenance.

“We do not expect economic conditions to change much in the second half, while the business divisions are well placed to continue to operational improvements seen through the last half,” the company said in a statement.

“Therefore we expect a material improvement in earnings in the second half, albeit still at a low level.”

At close of trade today, Coventry shares were down 0.7 per cent, at $2.82. 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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