- Release Date: 22/03/12 19:00
- Summary: FORECAST: BLT: Guidance and actions strategic review issued
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BLT 22/03/2012 17:00 FORECAST REL: 1700 HRS BLIS Technologies Limited FORECAST: BLT: Guidance and actions strategic review issued BLIS Technologies issues guidance and actions strategic review The Board of BLIS Technologies Ltd advises that the Company is expected to report a consolidated loss from operations of $1.87 million on consolidated turnover of $1.4 million for the year to 31 March 2012. The operating loss is after provision of $0.4 million for the preference share dividend and includes losses of $0.15 million recorded by BLIS Functional Foods (BFF) consequent upon the acquisition of the assets and undertakings of Gourmet Icecream. Consolidated trading revenue in the six months to 31 March 2012 is expected to increase to $1.4 million from the $0.3 million recorded in the six months to 30 September 2011. The expected loss from operations, in the six months to 31 March 2012 of $0.8 million is in contrast to the $1.1 million deficit recorded in the six months to 30 September 2011. As previously advised, the first half year of ingredient sales were affected by a change in the Company's global distribution arrangements and a strategy change by its then largest United States customer. Ingredient sales have commenced pursuant to arrangements with our new distributor Stratum Nutrition but not yet to the levels that the Company had previously expected at the time of the Share Purchase Plan (SPP) in September 2011. Based on current sales projections and following a cost review reported to the Board this month, a further operating deficit of approximately $0.8 million is anticipated for the financial year to 31 March 2013. Such a loss would exhaust the Company's existing cash reserves which are expected to stand at $0.7 million as at 31 March 2012. A further significant uplift in ingredient sales is required for the Company's financial performance to be acceptable. While conceivable, given the achievement of GRAS self-affirmed status (Generally Recognised as Safe), the approval to market BLIS K12 in China and the recent appointment of Stratum Nutrition, the Board considers it cannot rely on achieving such a sales uplift in the next twelve months. The Board initiated a Strategic and Financial Review of the Company's operations by Murray & Co in early January 2012, the results of which were presented to the Board this month whereby Murray & Co confirmed a potential requirement for additional capital, a factor the Board has been mindful of since the September 2011 SPP and associated placements raised $1.6 million rather than the $2 million to $3 million that had been planned for at the time. In light of the current financial position and expected performance, and based on the results of the Murray & Co review, the Board has undertaken a number of decisions, including: o The appointment of Murray & Co to solicit further capital for the Company; o As provided for in the Prospectus under which they were issued, the final preference share dividend due in May 2012 will not be paid in cash but will be satisfied by the issue of ordinary shares on the Conversion Terms subject to all deductions required by any applicable tax law; o Note: The Conversion Terms are ordinary shares issued at 95% of the ordinary share price prevailing in the 20 business days prior to conversion subject to a minimum conversion ratio of 25 ordinary shares and a maximum conversion ratio of 100 ordinary shares per dollar. The volume weighted average share price over the period 5 April to 8 May will determine the conversion ratio. o Director's agreeing to forego fees including those due for the March 2012 quarter; o Initiating further operating cost reviews including the merit of maintaining an NZX listing. The Board also notes that, as a consequence of the relatively poor operating performance and immediate operating outlook, a review of the intellectual property on the Company's Balance Sheet conducted in the context of the annual audit may require the carrying value to be revisited. If so, any impairment in the carrying value as at 30 September of $2.3 million arising from the review will add to the anticipated operating loss. End CA:00221051 For:BLT Type:FORECAST Time:2012-03-22 17:00:16
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