MAD
27/11/2014 08:56
HALFYR
PRICE SENSITIVE
REL: 0856 HRS Energy Mad Limited
HALFYR: MAD: Energy Mad Interim Announcement
Media Release 27 November 2014
Leaner organisational structure and New LED Model to drive Energy Mad towards
profitability
Energy-efficient light bulb manufacturer Energy Mad has released its
unaudited results for the six months ending 30 September 2014.
Energy Mad delivered operating revenues of $4.0 million for the six months
ending 30 September 2014, compared to $4.0 million for the six months ending
30 September 2013.
The Australian revenue of $2.0 million for the six months ending 30 September
2014 was comparable to the revenue for the six months ending 30 September
2013.
The New Zealand Direct to Consumer revenue grew to $1.7 million for the six
months ending 30 September 2014, compared to $1.4 million for the six months
ending 30 September 2013.
The United States revenue grew to $0.18 million for the six months ending 30
September 2014, compared to $0.13 million for the six months ending 30
September 2013.
There was no European revenue for the six months ending 30 September 2014,
compared to $0.37 million for the six months ending 30 September 2013.
This resulted in a larger operating loss of $1.2 million for the six months
ending 30 September 2014. This compares to an operating loss of $0.5 million
for the six months ending 30 September 2013. The larger operating loss was as
a result of one-off transitional costs in shifting Energy Mad's strategic
focus to a new LED sales model, developing new LED Ecobulbs and moving from
providing significant in house services to outsourcing its operations to
third party sales forces.
Energy Mad has a small negative equity position of $0.2 million in its
statement of financial position. Energy Mad is progressing capital raising
options to remedy this and to progress its growth opportunities.
As a result of its recent re-organisation, Energy Mad has a leaner
organizational structure to focus on its Direct to Consumer Ecobulb LED sales
model utilising outsourced sales forces.
Energy Mad's growth and future profitability is expected to come from Direct
to Consumer Ecobulb LED sales growth with the New Zealand Agency Holders and
third party sales force sales in New Zealand and Australia, and from the
Australian energy efficiency schemes.
LED Ecobulb Direct to Consumer Sales Model to drive revenue growth
This LED Ecobulb direct to consumer sales model involves outsourced sales
forces in New Zealand and Australia demonstrating Energy Mad's LED bulbs to
consumers, and providing personalized energy savings forecast from replacing
their old light bulbs with LEDs.
The demonstration and savings forecast are conducted on an IPad based sales
tool that was developed by Energy Mad.
The current low uptake of LEDs in New Zealand and Australia, combined with
little competition in the direct to consumer space, creates a market
opportunity that Energy Mad is well positioned to take advantage of.
Energy Mad plans to scale-up these direct to consumer LED Ecobulb sales in
New Zealand through its four Agency Holder third party sales forces, and
through other third party sales forces sales in New Zealand and Australia.
Australian Energy Efficiency Schemes
Australia continues to provide growth potential for Energy Mad in Victoria,
the Australian Capital Territories and the South Australian State Government
electricity utility energy efficiency schemes.
This has recently been assisted by the Victorian State Government not now
enacting legislation to end the Victorian Scheme in December 2015 as it had
previously planned to do.
This means that the Victorian Scheme is no longer scheduled to end in
December 2015. Furthermore, this Scheme target resets to 5.4 million
certificates in 2015, which is up from the 2.0 million certificate target
that was previously in place.
The base Australian scheme sales will continue to be provided by the spiral
Ecobulb sales in the Victorian, the Australian Capital Territories and the
South Australian schemes.
The growth potential for Energy Mad comes in the Victorian Scheme for the
replacement of 12V halogen light bulbs with 12V Ecobulb LEDs.
While Energy Mad is currently delivering moderate and growing sales of this
12V Ecobulb LED, it has made recent changes that should increase sales
through increasing the Victorian energy saving certificates for its
customers, combined with its combination of appearance, high performance,
high transformer compatibility and attractive price relative to the other 12V
LEDs that have secured Victorian Scheme accreditation.
The United States
Walgreens re-orders delivered $0.17 million Energy Mad revenue for the six
months ending 30 September 2014.
However, Walgreens has not given Energy Mad sufficient support to enable
Energy Mad to deliver on the Walgreens sales potential, despite the
significant United States electricity utility energy efficiency funding
Energy Mad had in place and the Energy Mad efforts to support this potential.
As a result, Energy Mad has chosen to increase its investment into the direct
to consumer opportunities in New Zealand and Australia, while reducing its
investment into the United States. No restructuring costs are expected in
implementing this decision.
Energy Mad's will revisit increasing its United States business investment
once the growth potential of the direct to consumer opportunities in New
Zealand and Australia are being realised.
Innovative New Ecobulb LED Range
Energy Mad has developed and sourced a range of LEDs that it is supplying in
New Zealand and Australia.
Energy Mad's LEDs have market leading appearance and performance.
Energy Mad is now sourcing and testing the next generation of LEDs. These are
"smart" downlights that can be installed and remotely controlled by various
devices to customize the light output and colour in any room.
Becoming profitable and maximising growth
Energy Mad is focused on becoming profitable and then delivering profitable
growth.
Energy Mad continues to strive towards breakeven revenue with the current
Australian energy efficiency scheme and New Zealand agency holder direct to
consumer Ecobulb LED sales, prior to further investment in Energy Mad's
growth.
Energy Mad's growth and profit potential in the future is expected to come
from direct to consumer Ecobulb LED sales growth from the New Zealand Agency
Holders, and from third party sales forces sales in New Zealand and
Australia.
We would like to thank our team and shareholders for their ongoing efforts
and support for Energy Mad during the challenging last three years.
ENDS
For More Information Contact:
Chris Mardon, Managing Director
(021) 041 2981
End CA:00258180 For:MAD Type:HALFYR Time:2014-11-27 08:56:08
