Blis Technologies takes $350k provision over safe but ugly product, affirms revenue forecast

Wednesday 4th November 2015

Blis Technologies, the probiotics product maker, has taken a $350,000 provision for a speckled discolouration of a lozenge product line in Europe, but has retained its expectations to double annual revenue, saying the product is safe and no other markets are affected.

The Dunedin based company launched an investigation into the product line this week, halting trading in its shares, after it found a quality problem in one of its product lines. It said today a particular formulation for one European customer found extreme humidity created speckling of the product, which "remains safe although cosmetically unacceptable". It is working with the customer to improve the production and transportation of the line, and will manufacture some lozenges in Europe as a short-term solution.

Blis will take a provision in its first-half result against the additional costs of replacing the product, but affirmed annual revenue guidance to rise by more than 100 percent to at least $5.3 million. The company still intends to expand product sales in Japan and Australia later this year.

"The underlying science behind Blis products is unquestioned and backed by clinical trials," the company said in a statement. "The problem does not affect product developed for other markets such as US, Japan and China."

The shares fell 7.7 percent to 2.4 cents after they resumed trading today, having gained 37 percent this year.

BusinessDesk.co.nz

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