Monday 23rd January 2012 1 Comment
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Newly listed energy efficient lightbulb marketer Energy Mad has slashed current year operating earnings projections in its prospectus from $3.5 million to $1.1 million, blaming production and product accreditation delays, high freight costs, and currency movements.
The company struggled for new shareholders before it listed on the NZX last November, requiring an 18 month waiver on the requirement that a listed company have 500 registered shareholders to achieve listing, having already extended its IPO deadline to drum up investor support.
Now, Energy Mad says Australian accreditation of its energy-saving downlights has taken longer than expected, and is now due by May, while production delays at its 20 percent-owned Chinese lightbulb manufacturing plant would also reduce full year earnings.
“Recent delays in the production of the new Ecobulb Downlights and getting the updated spiral accreditation in Australia, combined with higher than anticipated freighting costs and foreign exchange revaluations, will reduce Energy Mad’s 2012 financial year earnings before interest, tax, depreciation and amortisation to approximately $1.1 million from its IPO forecast of $3.5 million,” said managing director Chris Mardon.
However, the production delay would only change timing of cashflow, as the Australian order it related to was intact and would be fulfilled after March 31, he said.
“We were disappointed to be advised so recently of production delays with the new Ecobulb Downlights and have since addressed the underlying issues with the factory,” Mardon said in a statement to the NZX.
The company had also implemented price changes to avoid unexpected freight costs, including a unit price increase for its downlight product.
Energy Mad won $220,000 of government funding to advance its research into new energy efficient lightbulb solutions last year.
The company’s track record to date has been in organising mass market discounted offerings of energy efficient lightbulbs to customers of energy utilities, with the utilities meeting the cost of subsidising the higher priced bulbs.
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