Trilogy more than triples first-half profit; shares rise to record high

Wednesday 25th November 2015

Trilogy International, the skincare and home fragrance company, more than tripled first-half profit as it benefited from growth across all its markets. The shares hit a new record high.

Profit rose to $3.2 million, or 5 cents a share, in the six months ended Sept. 30, from $984,000, or 2 cents, a year earlier, the Auckland-based company said in a statement. Revenue almost doubled to $29.3 million from $15.3 million.

Trilogy, which manufactures and distributes skin care and home fragrance products through its Trilogy, Ecoya and Goodness brands, improved its performance in its home markets of Australia and New Zealand as well as in Asia and the US across both its product range. Its New Zealand cosmetics and fragrance distribution business, CS Company, which it acquired in August, contributed to sales and operational earnings, although the one-time acquisition costs of $234,000 weighed on the group.

"We are pleased with the first-half performance and the increased momentum we are seeing across the portfolio," said chief executive Angela Buglass.

The company's shares rose 1.7 percent to a record $2.39. Prior to today, the stock has soared 226 percent so far this year, making them the best performer on the S&P NZX All Capital Index.

Excluding the contribution from CS Company, first-half revenue rose 58 percent to $24.2 million, in line with the company's forecast at its annual meeting in September, while pretax profit increased 345 percent to $4.9 million, ahead of the $4.8 million forecast.

For the full year, Trilogy said it expects revenue of $75 million to $79 million, and earnings before interest and tax of $12 million to $14 million, in line with its earlier forecast. The company didn't pay a first-half dividend and expects to announce its full-year dividend after the annual results have been audited and published.

In the first half, the company's natural skincare unit more than doubled earnings before interest, tax, depreciation and amortisation to $5.5 million from $2.1 million, while revenue jumped 78 percent to $15.6 million.

Its home fragrance and body care unit boosted ebitda to $303,000 from $58,000 a year earlier as revenue lifted by a third to $8.6 million.

Meanwhile, its CS Company distribution business contributed $658,000 of earnings and $5.2 million of revenue following the acquisition on Aug. 17. Had the acquisition occurred at the start of the first-half on April 1, consolidated revenue and earnings before interest and tax would have been $13.6 million and $1.96 million higher respectively, the company said.

Trilogy paid an initial $34 million for CS Company and is liable for further payments over the coming two years, which it has estimated at $9.2 million. The acquisition was funded by bank debt and its interest bearing liabilities rose to $3.7 million from zero the year earlier. Its total liabilities jumped to $64.8 million from $9.3 million the year earlier.

In New Zealand, earnings more than doubled to $3.5 million from $1.3 million as revenue soared to $12.5 million from $4.4 million. In Australia, earnings more than doubled to $1.9 million from $842,000 as revenue jumped 48 percent to $10.9 million.

In the US, the earnings loss narrowed to $99,000 from $120,000 as revenue increased to $872,000 from $81,000. In the UK and Ireland markets, earnings increased to $328,000 from $47,000, while earnings in other world markets rose to $774,000 from $297,000.

BusinessDesk.co.nz

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