Trilogy forecasts stronger first-half performance, benefits from weaker NZ dollar

Wednesday 23rd September 2015

Trilogy International, the skincare products and scented candle maker, said revenue and earnings for the September half-year will exceed guidance given in August following strong demand for its products and a weakening kiwi dollar. The shares rose.

Excluding any contribution from its recent acquisition of New Zealand’s largest beauty and cosmetic distributor CS Company, Trilogy expects revenue for the six months ending Sept. 30 to rise to $24 million, up $1 million on its August forecast and 57 percent above the $15.3 million achieved in the same period a year earlier.

It’s also forecasting first-half profit of $4.8 million, up from its August forecast of $3.5 million and from $1.1 million a year earlier. Trilogy’s shares climbed 6.6 percent to $1.62 on the NZX today and have soared 147 percent in the past year.

For the full year ending March 31, 2016, including the impact of the $37 million CS Company acquisition, Trilogy expects revenue to rise 104 percent to $75 million, earnings before interest and tax to range between $12 million to $14 million, and earnings before tax to be between $10 million and $12 million, up from $4.6 million in the previous year.

CS Company is expected to contribute an additional $5 million to group revenue and $800,000 to operating profit in the first-half although its impact on the bottom line won’t be material once financing and acquisition costs are accounted for.

In the second half, CS Company is forecast to contribute about $22 million of revenue and $3.5 million of profit.

Speaking ahead of the company’s annual meeting in Auckland today, chief executive Angela Buglass said Trilogy’s home markets of Australia and New Zealand are performing well for each of the three brands – Trilogy, Ecoya, and Goodness. The weakening kiwi dollar against the US and Australian currencies had a positive impact on trading with realised and unrealised foreign exchange gains contributing about $700,000 in the first half, she said.

The group had benefited from a sales boost after media reports that the Duchess of Cambridge is an avid user of Trilogy rosehip oil, Buglass said.

In April, Trilogy founder and director Sarah Gibbs announced her intention to resign from the board after three years, although she retains her shareholding at 5.2 percent. Her sister and fellow founder Catherine De Groot owns about 1.9 percent.

BusinessDesk.co.nz

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