Despite difficulties Pacifica is moving ahead

Nevertheless, it's a foregone conclusion that profits will be lower for the year to December 1998. Beyond that though it's a lot less gloomy. Forward orders of its brake caliper products remain strong and its US$100 million Knoxville plant has now been commissioned. The construction products division is also being aggressively expanded with the acquisition of the UK business of Lionweld Kennedy Limited. This should almost double the size of the division.

Lionweld manufactures aluminium and glass reinforced flooring, handrails and highway barriers and has a construction management division too. Its products are sold in 29 countries and generate annual sales of over A$90m. The acquisition should dovetail nicely into PPB's existing construction product businesses and will provide an immediate entry into the lucrative construction markets of the Middle East where plans are already well advanced to establish a joint venture operation.

Obviously, at a time when the company is trying to dig itself out of a hole, the Victorian gas debacle and the impact it had on operations could not have come at a worse time. While this is yet another negative, PBB has seen and dealt with worse.

The share price may be a lot lower than what it was 15 months ago but the company hasn't fallen out of bed. If you can focus on the long-term and ignore the short term fluctuations, then Pacifica remains a SPECULATIVE BUY but only on weakness.