New craft, new markets for Sealegs

Shares in amphibious boat builder Sealegs have dropped 8 per cent after it slumped to a $650,000 loss after tax in the half year to September 30, reversing a $122,500 full-year profit.

Sealegs blamed the loss on strong price competition in overseas markets reducing margins, despite sales increasing 10 per cent in the period to $8.38 million. The loss compares to a $134,000 loss reported for the first half of 2012.

Chairman Eric Series said the improved sales reflected an increase in the number of amphibious craft sold, in particular to Southeast Asia, where the company was opening new markets.

The international launch of the new, larger, higher value craft had helped maintain the average unit sales price.

Income has also increased from licence sales of Sealegs technology to third-party boatbuilders, Series said.

Sealegs is pursuing a strategy of working with foreign boatbuilders because it was not economic to produce larger vessels in New Zealand for export.

Sealegs was also considering moving production of its entry-level craft overseas to "leverage production efficiencies" and enter new markets, he said.

Sealegs recently launched amphibious technology for larger craft.

BusinessDay