GGRAsia – Crane 4Q sales flat, quarterly dividend increase announced

Crane 4Q sales flat, quarterly dividend increase announced

Jan 30, 2020 Newsdesk Industry Talk, Latest News

Crane Co, a United States-based industrial products conglomerate that sells payment processing technology to the financial sector including casinos, posted a net loss of US$112.6 million for the fourth quarter, it announced earlier this week.

Such loss compared to a profit of US$89.2 million a year earlier.

The negative result for the fourth quarter of last year was linked to an after-tax net provision of US$181 million for asbestos-related matters. Crane Co has been a defendant in cases filed in numerous U.S. state and federal courts alleging injury or death as a result of past exposure to asbestos.

In its fourth-quarter results, Crane Co said that in its payment and merchandising technologies segment – which includes cash handling technology for casinos – sales increased slightly by 0.6 percent year-on-year, i.e., to circa US$315 million, versus circa US$313 million in the prior-year period.

The company stated there was 2 percent of “core growth” in that segment, and 1 percent of “unfavourable foreign exchange”.

Profit margin improved 2.0 percentage points, to 16.7 percent.

Group-wide, quarterly sales were US$837.5 million, remaining flat in year-on-year terms.

Crane Co confirmed in its results release the acquisition of currency-handling company Cummins Allison Corp last December for US$160 million on a cash-free and debt-free basis. Crane said it was “a strategic bolt-on” to its Crane Payment Innovations business line – the latter serves the casino industry.

Max Mitchell, Crane Co president and chief executive, said in prepared remarks issued in the press release on the quarterly figures: “Cummins Allison is a nice addition to our Crane Payment Innovations business, adding higher-speed and back-office banknote and coin counting, sorting and validation solutions aligned with CPI’s end markets in retail, gaming and financial services.”

In other developments, Crane Co declared a 10-percent increase in its quarterly dividend, to US$0.43 per share from US$0.39 per share. The next dividend is payable on March 11 to shareholders of record as of the close of business on February 28.

Crane also provided investors with guidance regarding the company’s expected performance in 2020. Management said it expected full-year earnings per share in a range of US$5.75 to US$6.05. Sales were expected to be approximately US$3.5 billion.

“We expect payment and merchandising technologies to deliver positive organic growth in 2020 with underlying margin expansion,” said Mr Mitchell.