MAD
27/05/2015 08:30
FLLYR
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REL: 0830 HRS Energy Mad Limited
FLLYR: MAD: Energy Mad releases its FY2015 results
Energy saving light bulb company Energy Mad has released its preliminary
results for the 12 months ending 31 March 2015 (FY2015).
In FY2015, Energy Mad delivered operating revenues of $5.9 million, compared
to $7.5 million for the 12 months ending 31 March 2014 (FY2014). The
operating loss was $2.9 million for FY2015, compared to $3.7 million for
FY2014.
The Australian revenue fell to $3.4 million for FY2015, compared to $4.0
million for FY2014. This reduction was a result of the uncertainty
surrounding the continuation of the Australian Energy Efficiency Schemes,
which consequently reduced customer ordering.
New Zealand "Direct to Consumer" revenue fell to $2.2 million for FY2015,
compared to $2.9 million for FY2014.
The "Direct to Consumer" business was reorganised during the second half of
FY2015 and transitioned to a new sales model that utilises outsourced Agency
Holders and sales forces. The "Direct to Consumer" revenue reduction occurred
while the Agency Holders became established and began growing their
respective businesses.
United States revenue of $0.2 million for FY2015 was comparable to the $0.18
million in revenue for FY2014.
There was no European revenue for FY2015, compared to $0.4 million for
FY2014.
During FY2015, Energy Mad completed a major reorganisation of its business.
As a result, Energy Mad's Administration and General Expenses fell to $2.9
million for FY2015, down 17% from the $3.5 million for FY2014.
The loss for FY2015 was $3.2 million, compared to $5.7 million for FY2014.
FY2014 included an impairment of $1.4 million of its research and development
intangible asset written off and the reduction in a $2.0 million deferred tax
asset also written off.
As a result of the recent reorganisation, Energy Mad's Administration and
General Expenses are forecast to fall to $2.0 million (excluding the effects
of foreign exchange fluctuations), compared to $2.9 million for FY2015 and
$3.5 million for FY2014.
This is forecast to bring Energy Mad closer to its EBITDA profit point of
$6.4 million.
Energy Mad's growth and future profitability is expected to come from "Direct
to Consumer" Ecobulb LED sales growth through the sales of the New Zealand
Agency Holders and third party sales forces in New Zealand and Australia, and
from the Australian Energy Efficiency Schemes.
Energy Mad has also completed a Renounceable Rights Issue that resulted in
Energy Mad raising the $2.2 million targeted amount. Twenty-nine percent of
Energy Mad's shareholders participated in this Rights Issue.
Ecobulb LED Direct to Consumer sales model to drive revenue growth
The Ecobulb LED "Direct to Consumer" sales model involves outsourced sales
forces in New Zealand and Australia, which will demonstrate Energy Mad's
Ecobulb LEDs to consumers and provide personalised forecasts of energy
savings from replacing their old light bulbs with Ecobulb LEDs.
The Ecobulb LED demonstrations and energy savings forecasts are provided 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 positioned to take advantage of.
Energy Mad is scaling-up its "Direct to Consumer" Ecobulb LED sales in New
Zealand by assisting its four Agency Holders to scale-up their sales force
teams. In addition, Energy Mad is also pursuing other third party sales
forces sales in New Zealand and Australia.
Australian Energy Efficiency Schemes
Australia continues to provide growth potential for Energy Mad through the
Victorian, Australian Capital Territory and South Australian State Government
electricity utility energy efficiency schemes.
This growth potential is supported by the continuation of the Victorian
Energy Efficiency Scheme, which has a new target of 5.4 million energy saving
certificates for 2015. This is an increase from the previous target of 2
million.
The South Australian Energy Efficiency Scheme has set new energy efficiency
targets that almost double the amount of energy required to be saved in 2017,
compared with the energy required to be saved in 2015.
The base Australian sales will continue to be provided by the sale of spiral
Ecobulbs in light of the Victorian, Australian Capital Territory and South
Australian Energy Efficiency Schemes. However, spiral Ecobulb sales are
expected to reduce with time as the remaining incandescent light bulbs in
these three Australian States are replaced.
Energy Mad secured a $140K Ecobulb LED order from one of its largest
Australian Energy Efficiency Scheme customers in late February 2015. However,
delays in the customer getting the installations underway saw the customer
return $100K of this stock in late April 2015. Installation finally commenced
in late April 2015, with Energy Mad commencing re-supply of these Ecobulb
LEDs in May 2015. Ecobulb LED sales are expected to grow during the course of
2015 as this customer ramps up their installation activities.
As noted in previous market announcements, part of Energy Mad's Australian
growth potential comes from the Victorian Energy Efficiency Scheme in the
form of the replacement of 12V halogen light bulbs with 12V Ecobulb LEDs.
However, the overall Ecobulb LED potential for Energy Mad in the Australian
Energy Efficiency Schemes has now increased. This is the result of Energy
Mad's development of a wider range of new Ecobulb LEDs, which target
previously under-utilised opportunities in the Australian Energy Efficiency
Schemes where there has been a lack of suitably performing and priced LEDs
being available in the market.
Energy Mad's new Ecobulb LEDs include dimmable and high light output 12V
Ecobulb LEDs, and dimmable incandescent reflector and globe replacement
Ecobulb LEDs.
Energy Mad's focus is completing the testing required to secure the
Australian Energy Efficiency Schemes accreditations to enable the sale of
these Ecobulb LEDs to commence.
The United States
Energy Mad has ceased employing any staff in the United States. No
restructuring costs resulted from implementing this decision.
New and innovative Ecobulb LED range
Energy Mad has developed and sourced a wider range of Ecobulb LEDs that it is
supplying in New Zealand and Australia.
Energy Mad's new Ecobulb LEDs have certain market leading performance
characteristics, including lighting output, efficiency, lifetime, and
transformer and dimmer compatibility.
Energy Mad is now sourcing and testing the next generation of Ecobulb LEDs in
order to commence sales. It has commenced initial production and sales of the
"Smart" Ecobulb LED Downlight that can be installed and remotely controlled
by various devices to customise the light output and colour in any room.
There are currently few comparable products to the "Smart" Ecobulb LED
Downlight, and Energy Mad sees sales potential in this product, particularly
in the "Direct to Consumer" business.
Focus for the 12 months ending 31 March 2016
Energy Mad is focused on becoming profitable and then delivering profitable
growth by focusing on the current Australian Energy Efficiency Scheme and
"Direct to Consumer" Ecobulb LED sales.
Energy Mad's growth and profit potential is expected to come from the "Direct
to Consumer" Ecobulb LED sales growth from the sales of the New Zealand
Agency Holders and third party sales forces in New Zealand and Australia.
Energy Mad would like to thank its team and shareholders for their ongoing
efforts and support during the challenging last three years.
ENDS
For More Information Contact:
Chris Mardon, Managing Director
(021) 041 2981
End CA:00264840 For:MAD Type:FLLYR Time:2015-05-27 08:30:05
