Crane Group has not unexpectedly forecast an improvement in prospects as it steps up its opposition to the unsolicited offer from Fletcher Building.
The statement is the usual counter to a takeover offer that doesn’t have the support of the target’s board.
Crane told the ASX on Friday that it expects half year net profit to be up 17% on the prior first half, with full year profit to be at least 5% higher.
And the company has promised shareholders a 4c a share lift in interim dividend to 22c a share.
Crane Group said in a statement it expected half year net profit before significant items to be $21 million, up 17%, when the company announces its half year results this Friday, January 28.
Its Target Statement is due to be issued on January 31.
Crane held to its full-year 2011 forecast of a 5% increase in net profit after tax, before significant items, and a 15% rise in earnings before interest and tax.
Earnings before interest and tax would be up 29% to $39 million, and up 26% after excluding the contribution of recently acquired Hudson Building Supplies.
Crane said it would pay an interim dividend of 22c, fully franked, the company said, in a market update based on unaudited half year accounts.
The news didn’t impress the market and Crane shares closed at $9.36 on Friday, down 17c.
Crane said revenue rose 6% for the six month to December 31 to $987 million.
“The benefit of the considerable work undertaken over the past two years to improve the underlying performance of our businesses is now being seen," said CEO Greg Sedgwick.
“Material improvements in earnings are being recorded as demand in a number of customer market segments begins to improve.”
The pipeline and trades distributor has urged shareholders to reject Fletcher’s bid as too low and Mr Sedgwick has indicated there was interest in the company’s trade distribution business, Tradelink, and it was looking at all options.
"The benefit of the considerable work undertaken over the past two years to improve the underlying performance of our businesses is now being seen," Crane CEO Greg Sedgwick said in the statement.
"Material improvements in earnings are being recorded as demand in a number of customer market segments begins to improve."
Fletcher’s offer closes on February 25.
In an outlook statement, Crane said it expects to post a solid trading result for the second half of the year.
"In Pipelines, continued growth in building, telecommunications and mining will underpin EBIT improvement. Lack of rural water infrastructure spending will mean Mitchell Water earnings are expected be approximately $1.0 million for the full year as the business focuses on the civil market.
"In Trade Distribution, strong growth in Western Australia and a continued recovery in New Zealand will underpin EBIT improvement. The Hudson acquisition is expected to contribute approximately $3.0 million for the full year as acquisition synergies are realised.
"Based on the forecast trading conditions outlined above, it is expected that net profit after tax, before significant items will be up by at least 5% for the full year with EBIT up approximately 15% for the full year."
