Ecoya posts $2.6 million first-half loss

Wednesday 24th November 2010

Scented candle company Ecoya made a $2.6 million first-half net loss on sales of $4.4 million and says it is on track to meet its May prospectus forecasts.

The result includes one month's trading from skincare company Trilogy purchased on September 1. Excluding Trilogy, sales were $3.1 million for the six months compared with $3.9 million for the year ended March.

The prospectus forecast sales in the year ending March 2010 would be $8 million and the company would make a net loss of $5.1 million.

The company says the Trilogy purchase will significantly boost annual sales and decrease the forecast full-year loss.

Excluding Trilogy, Ecoya's made a first-half $2.1 million loss before interest, tax, depreciation and amortisation while Trilogy contributed a $369,000 profit.

Ecoya paid $10 million in cash for Trilogy, partly financed by a $6 million placement and share purchase plan. It will pay an earn-out of up to $10 million, depending on Trilogy reaching earnings targets.

The company says Ecoya is now sold in more than 1,000 stores in Australia including the David Jones department stores, in more than 250 New Zealand stores, 100 US stores and more than 50 stores in key Asian cities.

It says it will add five new products in the body and bath cosmetics category over the next three months.

“The extension of the product range to position Ecoya as a full home fragrance and body and bath provider was always a natural step of Ecoya,” says executive chairman Geoff Ross.

The company says as it grows, it is making production efficiency gains and expects to make more as volumes increase.

Ecoya shares last traded at 75 cents last week, the same price as the placement but well below the $1 float price.

BusinessDesk.co.nz

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