Veem to miss prospectus targets

Recently listed marine technology company VEEM has flagged gross profit in line with expectations, but expects to report a smaller net result than what was forecast in its prospectus, on the back of a one-off cost.

Canning Vale-based Veem, which listed on the ASX in late October after completing a $25 million initial public offering, told the market today it had achieved a gross profit of $10.4 million for the six months to December, in line with its prospectus forecast, with margins increasing from 44.5 per cent to 50.2 per cent.

It also expects its pro-forma net profit for the first half to come in at between $2.25 million and $2.45 million, close to its forecast $2.4 million.

However, statutory net profit for the half-year is expected to come in at between $1.1 million and $1.3 million, down from its prospectus forecast of $2.05 million, due to a one-off cost associated with higher than expected costs associated with its IPO.

It also said revenue for the six months to December came in at $20.76 million, down from its prospectus estimate of $23.39 million.

“The difference is partially attributable to an increase in work in progress and stock of approximately $775,000 related to contracts not completed within the reporting period,” Veem said on its lower revenue result.

Pro-forma net profit is expected to be in the range of $2.25 million and $2.45 million, in-line with the company’s prospectus forecast of $2.4 million.

“The first-half result was pleasing for the company and reflects the strong gross profit margins that can be achieved from our highly specialised propulsion and gyrostabilisation products, addressing a global marine market,” Veem chairman Brad Miocevich said.

Veem shares were 7.6 per cent lower to 60 cents each at 10am, in-line with its closing price on its ASX debut.