As expected, Sydney-based industrial products group, Alesco Corporation has reported another annual net loss and says it remains cautious about the next 12 months.
The company met its updated guidance from six week ago yesterday.
The company reported a net loss of $124.3 million for the year ending May 31, which compares to a loss of $12.8 million a year earlier.
Revenue was down nearly 10% to $773.2 million.
Alesco also confirmed the earlier guidance that it will not pay a final dividend but expects to resume paying dividends from the 2011 interim dividend in March of next year.
Alesco new chief executive, Peter Boyd, said in yesterday’s statement:
"As stated in our announcement in June, Alesco’s financial performance and shareholder returns have been unsatisfactory. In particular, the performance of our Water Products & Services (WPS) and Functional & Decorative Products (FDP) divisions has been below expectations in FY10.
"The $133.1 million impairment charge for the WPS division has also had a significant impact on our bottom line.
"While Alesco is generating trading profits and good cash flow, operational focus must be sharpened to restore our revenue base and operating margins.
"Alesco has a good portfolio of businesses with strong industrial brands, which need to be fully leveraged to grow revenue.
"This combined with improved manufacturing and distribution efficiencies and higher levels of customer service, will deliver the margin improvement we require.
"We are not waiting for a market recovery.
"We are focused on delivering a comprehensive business improvement program – ‘Project Restore’ – over the medium term.
"‘Project Restore’ involves key operational and capital development initiatives, each of which is designed to improve our performance and meet our financial objectives.
"An investment in capital and additional operational expenditure during FY11 will be required to deliver these initiatives.
"Financial benefits will start to flow in the second half of FY11 and into FY12.
"Overall, we expect these projects to deliver a benefit of $4 million in FY11, offset by one off costs of $5 million, and annual benefits in excess of $9 million by FY12, irrespective of any changes in market conditions, " he said.
A trading update will be provided at its Annual General Meeting on September 22.
Alesco shares traded up a cent at $2.52 yesterday.
The company had also issued a downgrade back in early March.
That saw the shares fall sharply, down $1.52, or a third in the space of two days, from $4.56 to around $3.04.
They have slowly weakened ever since.
