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Demand for Wellington Drive's IoT system boosts 1H sales 18%

Wednesday 15th August 2018

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Wellington Drive Technologies lifted first-half sales by almost a fifth as its internet-of-things cooling and inventory management system attracted new customers, including its first in the dairy sector. 

The company, which makes energy efficient motors and control systems for commercial refrigerators, said revenue was $28.1 million in the six months to June 30, rising at a faster pace than previously forcecast. The second quarter was particularly strong, with record revenue of $16.3 million versus $11.1 million a year earlier. 

"The increasing diversity of the markets we serve and our growing customer base for IoT solutions and ECR2 motors helped deliver strong revenue in the first half. We were particularly pleased with our record second-quarter revenue and winning our first dairy products customer," said chief executive Greg Allen. 

The new dairy products customer is expected to reach US$1 million of revenue by early 2019, it said. That's an indicator of how Wellington’s IoT solutions are being used beyond carbonated soft drink brands.

The dairy sector is an important target market for the company’s IoT platform, which helps improve the management of in-store dairy coolers and also facilitate improved management of food quality and loss for the industry. 

The company said its first-half net loss narrowed to $200,000 versus $500,000 in the prior year. Earnings before interest, tax, depreciation, amortisation and impairment were $1.1 million versus $1.0 million a year earlier. 

It also generated cash in the first half, with cash at $2.6 million on June 30 versus $1.6 million on Dec 31.  The net debt position also improved, standing at $600,000 on June 30 versus $1 million at the end of December. 

Looking ahead, second-half revenue is expected to be similar to the first six months of the year, and ebitda will be around $1 million. It trimmed the top end of annual ebitda guidance to a range of $2 million to $3 million from an earlier forecast for earnings of $2 million-to-$4 million.

"The achievement of a net profit remains a target," it said. 

While the company expects to generate positive operating cash flow in the year, it said the "extension of customer payment terms, the increased demand for higher levels of locally-held inventory, the opportunity to accelerate investment in several high-growth IoT projects and repayment of existing debt is causing the board to explore a range of funding alternatives to ensure continued significant growth rates."

It provided no details but will release the full interim result on Aug. 29. 

The stock rose 2.9 percent to 18 cents, having gained 9.4 percent so far this year. 


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