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Matrix slumps on big profit downgrade
The West Australian

UPDATE 1.30pm: Shares in one-time market darling Matrix Composites and Engineering slumped after the company again disappointed investors with a tiny first half profit and a big downgrade for its anticipated full-year profit.

Matrix posted a first half profit of $527,501, up from a $2.4 million loss in the previous corresponding period.

The result came on a 2.3 per cent slide in revenue to $81.6 million.

The company also warned its full-year net profit was likely to be about $1 million, down from previous guidance within a range of $6.6-$10.9 million.

Expected full-year revenue was revised down to about $145 million from the previous guidance of a range between $165 million and $175 million.

"While the revised guidance is disappointing and below previous expectations, the Board considers that market conditions are set to improve, as evidenced by the recent strong recovery in the buoyancy order book and a recovery in well construction sales," the company said in a statement.

Matrix said first-half revenue was adversely affected by lower than anticipated production arising from the reconfiguration of its plant shift roster, short term delays resulting in lower than expected sales revenue for well construction products and lower than anticipated sales revenue from SURF ancillary equipment, and weaker order conversions for riser buoyancy products.

It also cited a continuing strong Australian dollar and competitive pricing pressure.

However Matrix said it had stabilised its buoyancy production levels which had since recovered to target rates.

"The company grew its order book from $US73 million in the first quarter to $US110 million in the second quarter which equates to a backlog of 10 months," it said.

"Matrix is targeting a 12-month minimum backlog of contracted orders.

"The group continued to experience strong quotation activity across all product lines."

Matrix shares sunk 25 cents, or 14.54 per cent, to close at $1.47.