WDT
05/12/2014 16:57
QUARTER
PRICE SENSITIVE
REL: 1657 HRS Wellington Drive Technologies Limited
QUARTER: WDT: Wellington 2014 Third Quarter Results and Trading Update
The company's Q3 revenue result was $3.8M versus $4.7M in 2013. Gross margin
was 18.3% versus 22.9% in 2013. EBITDA was -$509k versus -$840k in 2013 and
the loss for the quarter was -$725k versus -$969k in 2013. The comprehensive
result for the quarter was breakeven versus a 2013 loss of -$1,423k, entirely
due to favourable foreign exchange movements. Cash on hand at end of Q3 was
$3M.
As advised at the half-year, lower demand from Latin American customers
continues to negatively impact revenues and profits. While not enough to
offset Latin American weakness, European and Asian revenues have shown a
significant increase versus 2013. With the continued pressure in Latin
America we now expect an EBIT loss larger than that incurred in 2013 and are
making adjustments to our cost base in response.
While the current year's trading performance has been more challenging than
expected, the company's growth recovery plan remains on track. The changes
we are making to our cost structure are intended to reduce our achievable
breakeven point from NZ$43m in revenue in 2013 to below NZ$25m in revenue
next year. As a consequence, we expect a much reduced loss in 2015, with a
breakeven result possible dependent on sales performance.
The next stage of the Wellington growth plan is the broadening of our product
offering, launching a new cloud based refrigeration management solution,
"SCSConnect" and a highly efficient "ECRWhisper" motor. Both products have
achieved technical and cost targets and the responses to test samples have
been very positive. We are seeing considerable interest in SCSConnect from
large soft drink bottlers and breweries, with four customer field trials
underway in December and with demand for further field trials currently
outstripping our resource availability. This product will realise the
company's strategy to move 'beyond the motor' and will establish Wellington
as a leading supplier of 'Connected Refrigeration Control Solutions'
For 2015 we are expecting a modest level of revenue growth as a result of new
business wins from our new regional channel partners, growth with supermarket
display customers and commencement of revenue generation from new products in
the second half of 2015. We remain cautious overall given that some of the
market drivers that impacted 2014 have not changed.
CEO, Greg Allen commented, "The Latin American market situation has
significantly challenged us this year and consequently we are being prudent
on expectations for a market demand come-back. We are excited by the
response we are getting on our new products, with customers telling us we
have developed solutions that they need and that are not available elsewhere.
Our products are opening up new possibilities for strategic partnerships"
* EBITDA (i.e. earnings before interest, taxation, depreciation and
amortisation is a non-GAAP earnings figure that equity analysts tend to focus
on for comparable performance analysis. The Company considers it is a useful
financial indicator as it avoids the distortions caused by differences in
amortisation and impairment policies. Q3 EBITDA is calculated as the loss
before interest and taxation of $623k (2013: 969k) less depreciation and
amortisation of $114k (2013: $129k). There was no impairment of non-current
assets in the period.
____________________________________________________________
Contact:
Greg Allen
Chief Executive Officer
Mobile: +64 27 777-9025
Howard Milliner
Chief Financial Officer
Mobile: +64 27 587-0455
End CA:00258588 For:WDT Type:QUARTER Time:2014-12-05 16:57:39
