Energy Mad sticks with forecast
Energy-efficient light bulb manufacturer Energy Mad is sticking with its prospectus forecast for the next year of a $4 million profit after falling well short of its inaugural profit forecast.
The company released its annual result today posting a $1.1m loss for the year to March 31, well under its prospectus forecast of a $3.12m of profit.
Energy Mad raised just over $5 million and listed on the New Zealand Stock Exchange in October last year.
It is the company's first annual result since listing. The loss was also a lot larger than
its $100,000 loss for the March 2011 year.
Revenue of $6.2m for the March 2012 year was less than half the $13.6m forecast in the prospectus.
Managing director Chris Mardon said the board was disappointed with the way the year had gone.
The prospectus forecast for the year to March 2013 was $21.3m in revenue and $4m in net profit.
''We are committed to delivering that. We have some work to do obviously because it's a big step up. Certainly securing Walgreen makes a big difference. It's an initial order (of $1.7m) but there should be other orders throughout the year that are of a comparable size.''
Energy Mad business was very scalable. It could increase sales but expenses would not increase by the same amount, he said.
The agreement to supply the huge Walgreen drug store chain in the United States was pivotal and Energy Mad had thrown resources into that in the past year. It had a $1.7m order and expected more in the future.
The company encountered a number of problems last year contributing to undershooting its forecasts.
The main ones were being short of cash before the IPO (initial public offering of shares in October) and so being unable to fulfil large orders in Australia, production problems at the factory in China - of which Energy Mad owns 20 per cent - with its new energy-efficient downlights, taking more time than expected to secure accreditation with Australian authorities for its lightbulbs and to secure a big new customer in the United States.
The company had net assets of $7.4m at balance date after the IPO.
During the year it had secured a $2m banking facility with the Hong Kong and Shanghai Banking Corporation.
Having Walgreen as a distributor would provide Energy Mad with the opportunity to secure and deliver electricity utility projects in the United States, Mardon said.
Australia is its biggest market. To meet regulations around energy efficiency, Australian power retailers were marketing and selling for large discounts Energy Mad's light bulbs to their customers. In the March 2012 year, Australian sales amounted to $4.45m.
- © Fairfax NZ News