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Sealegs cuts sales forecast, signals need for more capital

Monday 20th October 2008

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Sealegs Corp., the maker of amphibious boats, cuts its forecast for annual sales and said it will need more capital to fund cash flow requirements because of weaker demand for luxury goods.

Sales will be NZ$11 million to NZ$15 million in the year ending March 31, down from a previous forecast of NZ$18 million, the Auckland-based company said in a statement. Sealegs will report an operating loss for the year, it said.

"The result of the deteriorating economic climate has been felt by the company in the form of a sudden and significant reduction in the rate of new orders," chief executive David McKee Wright said in a statement. The current fixed overheads and stock levels mean that "further capital will be required to fund cash flow requirements."

Shares of the company were unchanged at 28 cents and have declined 26% in the past month. Some 50,000 shares had changed hands as at 1pm in Wellington, compared to an average daily volumes of 24,000.

By Jonathan Underhill

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