Charlie's posts second annual loss as costs rise

Friday 28th August 2009

Charlie’s Group Ltd., the unprofitable juice-maker formed by Simply Squeezed founder Stefan Lepionka and entertainer Marc Ellis, reported another full-year loss on rising costs as the company expanded into Australia and ran down deleted products.

The Auckland-based owner of Charlie’s and Phoenix Organics brand drinks reported a net loss of $1.8 million, or 0.63 cents a share, in the 12 months ended June 30. That’s wider than the previous year’s loss of $425,000, or 0.15 cents. Sales and distribution expenses soared 21% to $11.2 million as the juice-maker cleared its deleted lines in the second half of the year and boosted spending on staff and distribution.

Still, sales rose 2.3% to $34.1 million as Australian revenue surged 42% to $5 million, and a review of spending in the three months ended June 30 is expected to save $2.5 million a year.

“Our internal focus is to consolidate and take a conservative approach to the new financial year in order to generate profits regardless of the challenges within the current economic climate,” said chief executive Lepionka in a statement. “Australia continues to be a large opportunity and growth market for the group and as such, is commanding much focus in the current financial year.”

The shares were unchanged at 9.3 cents and have slumped 28% in the past 12 months. The company won’t pay a final dividend this year.

Charlie’s raised $370,000 last month after option issuance expired, and issued 3.7 million shares.

Total bank debt at the end of the year was $7 million, with annual interest of $641,000. It’s negotiating a sale and lease back of a property for $2.5 million which is expected to be settled at the end of October.

The proceeds will be used to repay ANZ Bank, which renewed the juice-maker’s facility until August next year.

Charlie’s has to make two payments of $500,000 next year due to the extension of the banking facility.

Businesswire.co.nz

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