Perth-based mineral tester, Ammtec, has used a very positive earnings update to again remind shareholders that they should reject the paper bid from rival tester, Campbell Brothers of Brisbane.
"Commensurate with these results, the Board recommends shareholders reject the unsolicited takeover offer by Campbell Brothers Limited (CPB)," Ammtec said in yesterday’s statement to the ASX.
CPB has offered $3.35 per Ammtec share, with an all-scrip alternative of 2 CPB shares for every 17 Ammtec shares.
At yesterday’s prices, two Campbell shares were worth around $60.66 and 17 Ammtec shares were worth around $59.84. Ammtec shares traded at $3.52, well above Campbell’s cash offer.
The timing of the profit announcement yesterday was interesting; coming just two days after Campbell started sending its bidders’ statement to Ammtec shareholders.
It was another opportunity for the Perth company to remind shareholders to ignore what they are about to receive in their mail boxes, or on line.
Ammtec said in the statement that it was "pleased to announce a $7.2 million net profit after tax for the year to 30 June 2010.
"The result, subject to audit, is in line with market guidance issued by the Ammtec Board in December 2009.
"The interim net profit of $2.9 million was followed by a second half net profit of $4.3 million."
Ammtec said it was forecasting continued strong earnings growth in FY11 on the back of enhanced performance from its core metallurgical and minerals testing business and improved contributions from recently acquired businesses (as it would with Campbell’s bid on the table).
Acting Managing Director, Ron Grogan, said in the statement that "it was very pleasing that Ammtec had returned to pre-GFC activity levels in the final quarter to produce what is a record half-year result.
"Our core metallurgical and mineral testing business has performed very strongly, with revenues up 8% on the previous year," said Mr Grogan.
"We have also seen the benefits of Ammtec’s substantial capital expenditure in recent years on new technology, and expansion and enhancement of our facilities.
"The enhancements include upgraded and expanded pilot plant facilities, a new assay lab, establishment of a new mineralogy division and upgrades to our sample preparation and gold laboratories."
Ammtec acquired the specialist engineering business Marc Technologies in February 2008 shortly before the Global Financial Crisis.
"For FY10, Marc has contributed segment profits before tax of $2.5 million compared to $1.3 million in FY09.
"The major improvement occurred in the final months of the year as demand for Marc’s dust suppression systems rose substantially.
"Marc has a very strong order book and Ammtec is forecasting the business will return to pre-GFC profitability in FY11. Although not reflected in the FY10 results, US based resin manufacturing business, PSI announced its first major sale this month.
"The contract with an international environmental technology group is worth $1.5 million for the treatment of industrial waste. The contract comes from the strategic business development plan and will be used as a platform to continue growth in the PSI business."
"We are forecasting that PSI will break even in the current coming year and be profitable in FY12 and beyond," Mr Grogan said in the statement.
