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New Image forecasts FY loss of $4 million

Thursday 24th May 2012

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New Image, which makes colostrum-based health tonics, has forecast a full-year loss of about $4 million as it writes down goodwill and stock.

Underlying profit is expected to be about $1.3 million in the 12 months ended June 30, the company said in a statement. Sales are predicted to fall 3 percent to about $73 million, when compared to a year earlier.

The Auckland-based company said the write downs include a loss on investments and the wind up of its executive share scheme. It also factors in the start-up costs for the establishment of the new spray dry milk powder and wet blend plant in south Auckland.

"The writing down of stock includes infant formula manufactured to order for Natural Dairy in China not taken up," said Graeme Clegg, chairman. "New Image has subsequently signed a number of contracts with Asian companies for the delivery of high volumes of infant formula from July 2012."

The orders are currently undergoing China Inspection and Quarantine approval.

In February, the company posted a first-half net loss of $157,000, after Malaysian pharmacies and retailers discounted the manufacture's drink powder, eroding sales. Revenue fell 5.4 percent to $35.2 million.

Shares in the company are currently trading at 12.2 cents and have shed about 40 percent this year.

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