Monday 28th June 2021
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Wellington is experiencing strong customer demand reflecting both new customer wins over the last 18 months, initial revenue from recent new product launches and a strengthening global economy. Wellington is now forecasting US$ revenue in the range of US$45m to US$50m, up from the previous range of US$41m to US$46m, and subject to component supply chain risks.
Before deducting non-recurring charges, Wellington expects underlying EBITDA earnings to be in the range of NZ$3.5m to NZ$4.5m, up from the previous range of NZ$2.5m to NZ$3m.
The recognition of the iProximity contingent consideration and September special payment will have an impact of approximately NZ$0.7m against the underlying full year EBITDA and pre-tax result, reducing underlying EBITDA guidance above to an EBITDA range of NZ$2.8m to NZ$3.7m. At the bottom end of this range, the company would record a modest pre-tax profit.
This forecast remains subject to the higher than usual level of risk that prevails in the current global environment, in particular for unexpected cost increases and unanticipated disruptions to supply. Suppliers are reporting an inability to supply some critical electronic components, despite confirmed purchase orders. Wellington’s supply chain team has done well so far this year to secure components, especially with the significant unforecast increase in customer demand, and will continue to work to avoid supply disruption over the forecast period. We do not want to disappoint customers.
The forecast assumes a NZ$/US$ exchange rate of US$0.70 for the second half of FY2021.
Q2 2021 revenue is forecast to be consistent with previous guidance of around US$12m, compared to US$2.9m in Q2 2020, which was the quarter most significantly impacted by COVID-19.
Wellington’s cash outlook is also looking strong. While month end net cash can fluctuate due to customer mix and timing as well as inventory levels, Wellington is currently forecasting to finish 2021 with net cash of around NZ$5m with a further NZ$1.9m of undrawn bank facility.
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