Blis Technologies cuts guidance with projected 2018 loss after weaker first half

Probiotics maker Blis Technologies won't deliver its maiden profit in 2018 as previously forecast after a weaker first half.

In July, the Dunedin-based company forecast it would post its first profit in the current year. Today, it downgraded those expectations, saying it expects revenue for the year to be similar to that of 2017, with a small positive earnings before interest, tax, depreciation and amortisation, and a net deficit.

The downturn is due to a 46 percent drop in first half sales to $2 million from $3.8 million a year earlier. Trading was weaker as sales in the first half of 2017 included "significant stock build" by its distributors in Japan and the US, but those distributors bought less stock this year, Blis said in a statement. It will post an ebitda loss of $953,000 and a pre-tax loss of $1.2 million in the first half.

The board said it anticipates a recovery in the second half.

"Contributors to this recovery include a move into the peak sales period for our products over the northern hemisphere winter, new customer launches in several markets and a return to normal ordering patterns following a correction in stock holding within the supply chain," Blis said. "The company has invested in revising the finished product portfolio and upgrading its marketing collateral, including the company's online presence. This puts the company in a stronger position to progress plans for finished product launches into key new markets, including expanding its online sales efforts internationally."

In August, chief financial officer Tim Mepham stepped down. At the time, Blis said Mepham would leave "in the coming months to pursue other business interests" and it was searching for a full-time replacement.

Blis had previously forecast a profit for the 2017 financial year but warned the market in February this year that pre-tax profit wasn't going to meet the $700,000 forecast due to significant reductions in purchases by three major customers.

The stock last traded at 2.8 cents and has shed 30 percent this year.

(BusinessDesk)