Legend Corporation improves financial year forecast

Legend Corporation improves financial year forecast

Net profit will range between $6.4 to $6.9 million for the financial year ending June 30.

ASX-listed IT, power and semiconductor distributor, Legend Corporation, (ASX:LGD) is estimating that its net profit will range between $6.4 to $6.9 million for the financial year ending June 30.

NPAT for the second half of the financial year, is estimated to be between $3.2 to $3.7 million compared with $3.2 million in the first half.

Second half profit forecast involves significant expenses of a non-recurring nature including a bad debt of $750,000 from a single customer insolvency and liquidation.

It also involves about $370,000 in relation to the write-off of leasehold improvements on the consolidation of the Western Australia operation into a single facility due to the rapid growth of the business, which required more space.

“The improved forecast in the underlying profit (before non-recurring expenses) for the second half is a result of management further reducing operating expenses to align with changes in the current business environment and growth from our investments in product range and sales geography expansion, despite overall market conditions remaining subdued,” Legend CEO, Brad Dowe, said.

Revenue for the second half was marginally ahead of the first half of the year, and is forecast in line with the prior corresponding period despite the continued decline in certain key markets for the Group. In FY12, Legend reported revenue of $103.2 million and NPAT of $9.4 million.

During the past three years, Dowe said, Legend invested $18.1 million in acquisitions, which are forecast to represent greater than 30 per cent of the company’s EBITDA for the current financial year.

The company stated it will continue to focus on delivering growth from recent acquisitions and refining and widening its product lines and sales regions to capitalise on available resources.

In June 2011 [[artnid:388910|Legend|bought MSS Fibre Group and MSS Power Systems.

At the time of publication Legend was trading at $0.27.

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