Company's plan to save $750k a year
Christchurch eco-lightbulb maker Energy Mad has placed almost $1 million worth of shares with an institutional investor and come up with a plan to save $750,000 a year.
The placement comes after the company previously reported a half a million dollar loss in the half year to September. Energy Mad expects to make around $100,000 for the year to March.
The company has sold 2.22 million shares to Auckland-based superannuation and insurance company SuperLife Investments for 45 cents a share, the same as the listed price on the NZX.
The $999,000 raised will be used to grow Energy Mad's business both domestically and the United States and Australia.
The company announced the disappointing half year result in November, and revised its $4m forecast profit for the year to March telling the NZX it was likely to be between $100,000 and $2m.
It now says its profit will be at the low end of that range because of delays getting its product on prominent shelves in the US and fewer projected sales in Australia where production problems wiped out $5m of potential revenue.
In a statement, the company said it spent the last few weeks scouring its business for savings and has reported it can cut its expenses by $620,000 and reduce capitalised costs by $130,000. The benefit of the savings will not be seen until about November or December 2013.
Meanwhile, the company was working to expand its business with American partner Walgreen Retail, after the lightbulbs went on sale at the 8200 stores across the country in early November.
Getting the bulbs on the dedicated displays originally planned with Duane Reade - which was taken over by Walgreen in 2010 - was critical to increasing sales and generating further orders. It could mean up to 940,000 sales each month from the American chain alone.
Meanwhile, Energy Mad was optimistic about capturing the $170m market for replacing halogen residential downlights in Victoria and New South Wales with its eco-friendly alternative. It expected to get accredited for the Victorian energy efficiency scheme in late January.
In New Zealand, the company would scale up the sale and installation of ecobulbs alongside insulation, which aims to both make money and cut residential power bills by a quarter. About 900,000 Kiwi homes used incandescent or halogen bulbs, he said.
Energy Mad has 565 shareholders, up from 460 shareholders when Energy Mad listed in October 2011. Its shareprice is 43 per cent lower than the 80 cents it commanded a year ago.