Trilogy International shares slump 14% on FY2017 guidance

Thursday 22nd September 2016

Shares of Trilogy International, which have almost tripled in the past 12 months, dropped to a three-month low after the skincare and home fragrance company raised its full-year sales guidance for a second time, suggesting investors were hoping for even better news at today's annual meeting in Auckland.

The stock dropped 14 percent to $4.01, and earlier sank as much as 18 percent to $3.81, trimming their gain in the past 12 months to 47 percent.

Daniel Metcalfe, senior investment advisor at OMF in Auckland was sceptical about the sell-off, "I think it's a bit of profit-taking. The guidance they've given seems pretty bullish to me. They're raising the bar yet again. But then again, they've had such fundamental growth over the last two years, perhaps investors expected more."

The company told shareholders at their annual meeting in Auckland that it expects 2017 revenue of $100 million to $110 million, a gain of between 20 percent and 32 percent over 2016's $83 million of sales.

Trilogy's brands include Ecoya candles, Trilogy and Goodness. It also owns CS & Co, the country's largest independent importer and distributor of fragrances and toiletries, which it bought in August 2015.

Earnings before interest, taxation, amortisation and depreciation are expected to be $19 million to $21 million, an increase of between 17 and 29 percent. That compares with ebitda of $16.3 million in the 2016 full year.

If Trilogy International achieves $100 million in revenue it would have almost tripled sales in just two years, mainly through the CS & Co acquisition. CS & Co delivered $28.6 million in revenue in the seven and a half months it contributed to Trilogy's FY2016.

Also at the AGM, chairman Geoff Ross confirmed that an application to list on the ASX through an ASX foreign exempt listing had been submitted, which subject to approval, will see Trilogy International listed on the ASX by the end of October.

BusinessDesk.co.nz

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