MaxiTRANS stuck in second gear

MaxiTRANS Industries (MXI) issued a profit warning at its annual general meeting this morning as the recent pickup in consumer confidence has not translated to an increase in business activity.

The tipper and trailer company is expecting its first half net profit guidance to range to between $10 million and $11 million compared with the $12.8 million it booked at the same time last year.

Drought conditions in Queensland and intensifying competition are exacerbating the situation and the state is a major market for MaxiTRANS tipper equipment.

The good news is that consensus downgrades will be slight as analysts polled on Bloomberg were already predicting a 10% drop in net profit for 2013-14 to $23.6 million.

Earnings are very slightly skewed to the second half, so this could imply a downgrade of between 7% and 15% if conditions do not materially improve for the six months to end June next year.

The relatively modest impact on full year earnings probably explains why the stock has only shed 3 cents, or 2.2%, to $1.36.

MaxiTRANS is part of the Uncapped 100.