Christchurch ecobulb company Energy Mad is aiming for profitability this year, after fronting up to losses for the past three years.
The board of the energy-efficient light bulb manufacturer was grilled by a handful of shareholders disappointed with the falling share price at yesterday's annual meeting.
"My concern, the same as most of the shareholders, is that my shares were worth a lot, and are now worth 18.5 cents," one shareholder said.
Energy Mad shares reached an all-time low this week, having dropped almost 80 per cent from the original NZX listing price of $1 per share.
Chairman Richard Ramsay acknowledged, "from the outset, Energy Mad has failed to deliver and make a profit as a listed company".
The company has been plagued by issues since it listed on the NZX in October 2011. It has posted steadily increasing losses of $1 million in 2012, $2.5m in 2013 and $5.66m in the year ended March 2014.
The award-winning company has failed to meet profitability promises in the past, after predicting a $4m profit in 2013 in its initial public offering, and predicting a profit again for the March 2014 financial year.
Energy Mad was recognised in the Deloitte Fast 50, and received accolades from PricewaterhouseCoopers, Canterbury Champion and New Zealand Business awards.
This year, the firm was struck another blow when major Australian shareholder Dr John Hewson, a former leader of the Australian Liberal Party, sold off his remaining 115,000 shares, losing the company $7.7 million in tax losses. Energy Mad needed to maintain 49 per cent minimum continuity of shareholding to utilise the tax losses when the company became profitable.
Ramsay said yesterday the board had "made every possible endeavour" to stop Hewson selling his shares, including seeking legal advice, and was "extremely disappointed" with the result.
Because the founding shareholders have not sold their shares, $4.7m in tax losses can still be accessed.
But the company is aiming for a swift turnaround of fortunes, with an unusual new business model and a drop in overheads. The company is changing from making and selling compact fluorescent lamps (CFL) to light-emitting diode (LED) bulbs.
Ramsay said while LEDs were "on the horizon" three years ago, they were relatively new and expensive for residential and commercial buildings.
The situation, he said, had "changed dramatically in the last year, and Energy Mad has recognised the market opportunities."
The company is now also switching to a door-to-door sales model, a change managing director Chris Mardon admitted "might sound strange in the age of the internet".
When asked when the company was hoping to make a profit, Mardon told The Press yesterday after the meeting: "this year".
Mardon told the meeting the new model would cut overheads by outsourcing sales staffing to commission-based companies.
"We're moving away from a model that costs us cash regardless of whether the bulbs sell," he said.
Door-to-door sales of the bulbs were already growing rapidly in New Zealand, and the company was preparing for trials in the United Kingdom, United States and Australia, Mardon said.
The company has spent several years trying to crack the United States market, and was boosted when large chain Walgreens picked up $2.5 million of bulbs in 2012.
But sales were lower than expected, and no repeat orders were received in the past financial year.
- The Press