Metro Performance Glass trading update and FY24 guidance

Metro Performance Glass (ASX: $MPP) has issued a trading update and guidance for the FY24 year. The company reported a softening in the residential sector, impacting the demand for glass. CEO Simon Mander highlighted the increased uptake of high value LowE glass and the company's actions to resize and reduce costs in response to the market conditions. Additionally, the divestment process of Australian Glass Group (AGG) to reduce debt is ongoing, and the company expects to provide a further update prior to the annual results in May 2024. The economic forecasts for 2024 suggest a restrained year with stubbornly high inflation and interest rates placing downward pressure on the sector, offset by underlying housing demand from immigration.

Executive Commentary on Trading Update and FY24 Guidance

CEO Simon Mander stated, 'Activity in the residential sector softened through the second half of 2023, impacting demand for glass. Reduced supply chain costs were supportive, and the uptake of high value LowE glass continues to increase. We have taken actions to resize the business and reduce costs, including the closure of a regional branch in Auckland and a reduction in headcount in New Zealand by 10%. The divestment process of Australian Glass Group (AGG) to reduce debt is ongoing, and we expect to provide a further update prior to the annual results in May 2024. Economic forecasts for 2024 suggest a restrained year with stubbornly high inflation and interest rates placing downward pressure on the sector, offset by underlying housing demand from immigration.'

Summary of Metro Performance Glass Trading Update and FY24 Guidance

Metro Performance Glass reported a softening in the residential sector, impacting the demand for glass, particularly in New Zealand. The company has taken measures to resize the business and reduce costs, including the closure of a regional branch in Auckland and a reduction in headcount in New Zealand by 10%. The divestment process of Australian Glass Group (AGG) to reduce debt is ongoing, and the company expects to provide a further update prior to the annual results in May 2024. Economic forecasts for 2024 suggest a restrained year with stubbornly high inflation and interest rates placing downward pressure on the sector, offset by underlying housing demand from immigration. Despite the challenging outlook, the company remains focused on improving profitability and has implemented cost reduction programs in New Zealand. The board has also undergone changes to increase its focus on performance improvement and debt reduction strategies. The company and its banking syndicate are about to commence working on the conditions for a potential renewal of existing bank facilities, with the syndicate anticipated to remain supportive while the company enacts plans required to reduce debt and increase profitability.