Energy Mad outsources NZ consumer sales to focus on Australia
My Eco Ltd will become responsible for NZ direct-to-consumer sales from the beginning of June.
Energy efficient lightbulb marketer Energy Mad [NZX: MAD] is to outsource its New Zealand direct-to-consumer sales in a bid to focus on its growing Australian market.
My Eco Ltd, which is owned by Lawrence Grant, will become responsible for New Zealand direct-to-consumer sales from the beginning of June. He has managed the direct-to-consumer business in NZ for Energy Mad since 2011 and will cease to be an employee from the end of May.
Energy Mad's focus will instead be on the development and supply of Ecobulb LED bulbs, with some employees expected to transfer over to My Eco Ltd.
The company says this is expected to increase the operating profit from direct-to-consumer sales in New Zealand. That area of business recorded an unaudited operating loss of $127,000 on $542,000 of sales between February and April, before depreciation and amortisation of $5000.
Energy Mad is increasingly focusing on sales across the Tasman. In the same period, it recorded operating revenues of $3.8 million of which Australian sales contributed $3.2 million. This was mainly due to its bulbs being sold into Australian state government energy efficiency schemes. It made an unaudited operating profit of $555,000, before exceptional items.
The company says this growth is leading to an increasing need for working capital, which it is tackling. Investors have been told that it expects to deliver a continuation of this operating profit in the 2017 financial year but it will not deliver positive earnings before interest, tax, amortisation and depreciation in its 2016 financial year due to restructuring and one-off air freighting costs.
Shares in Energy Mad were unchanged at 6.5c and have gained 62% since the start of the year. Its share price remains well below the $1 float price when the company joined the NZX in September 2011.
(BusinessDesk)
BusinessDesk receives funding to help cover the commercialisation of innovation from Callaghan Innovation.
Edwin Mitson
Fri, 13 May 2016
Fri, 13 May 2016
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Energy Mad outsources NZ consumer sales to focus on Australia
58121