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Wellington drive puts foot on the pedal

Friday 28th November 2003

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Wellington Drive Technologies finally has something to smile about ­ its shares are tantalisingly close to recovering to their listing price way back in February 2001.

First listed at 81c, the company's shares went as low as 20c after it posted a larger-than-expected half-year loss of $1.27 million.

This week they were back up to 75c following a splattering of relatively positive announcements.

The North-Shore-based company, which makes brushless motors for appliances such as fans and air conditioners, says it has received significant orders through its European partner, P Lemmens Air Movement Co.

While the details are scratchy, the deal at least confirms the company has finally materialised its proclaimed high overseas interest.

Wellington Drive appears to have a good product and revenue is growing, albeit slowly. Revenue was $950,000 for the year to June 30, up on the previous period's $530,000.

The company recently announced a licensing agreement with US-based electric motor manufacturer A O Smith, which is expected to bring additional production capacity behind the Wellington division's standard lines.

Earlier this year the company raised $3.69 million from a one-for-eight renounceable rights issue. The issue closed oversubscribed.

Wellington managing director Ross Green said it was difficult to provide projections of future profitability, which underlined the speculative nature of the stock. Wellington Drive reported an unaudited bottom-line loss of $2.3 million for the June year, an improvement on the 2002 $3 million loss.

However, the directors are confident the company will move into profit for the 2005 financial year.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond

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