Energy Mad says well placed for profit
Energy Mad is well positioned to deliver a profit for the 2014 financial year, the company's chairman told shareholders at the annual meeting in Christchurch today.
Having "endured a difficult and disappointing period" the company was focused on a return to profit, Rick Ramsay said.
Continued revenue growth from the United States, Australia and its New Zealand direct installation business, combined with a strong balance sheet and no debt, positioned the company to deliver a profit for the 2014 financial year.
Ramsay and managing director Chris Mardon acknowledged the company's failure to deliver on its pre-listing projections for revenue and profit at today's meeting.
The company reported a net loss of $2.5 million for the year to March 2013, compared to its IPO $4m profit forecast.
Explaining "what went wrong" in the 2013 financial year, Mardon said delayed introduction of the company's 12-volt Ecobulb into Australia, quality issues with its 240V downlight and lower than expected sales in Europe and Australia had all meant lower than forecast revenue.
The light-bulb making company was now focusing on five steps to improve performance.
- Growing light bulb sales through the 8000 stores of United States drugstore giant Walgreens
Energy Mad has secured $1.5 million of funding for projects with 28 electricity utilities through 1350 Walgreens stores in 2013. This funding allows the retail pricing of Energy Mad's light bulbs to be heavily discounted in these stores, without impacting Energy Mad's margins.
- Driving its Australian Ecobulb spiral and downlight sales.
- Growing its direct installation business profitably. This sells and installs Ecobulb downlights into New Zealand homes.
- Introducing reliable new Ecobulb products into the market - including adding selected LEDs to its portfolio by late 2013.
- Cost-cutting across the company.
The rejigging of the company's management structure - with chief financial officer Paul Ravlich promoted to chief executive focusing on the direct installation business and reducing costs, had allowed Mardon to focus on growing sales, and director Tom Mackenzie to focus on new products and technology.
Max Smith, an associate board member of the New Zealand Shareholders Association, said today's presentation had answered most of his questions.
The board seemed to have done its homework and come up with some good strategies and policies and he congratulated them on that.
Energy Mad's shares were last trading flat at 34 cents a share, 34 per cent or 18 cents lower than year-ago levels.