Energy Mad shares drop as further losses unveiled
"The company relied on Labour policy of telling NZ households what type of light bulb should be fitted in their houses."Featured comment
Energy efficient lightbulb retailer Energy Mad [NZX: MAD]has turned in another loss and has decided to write off a $2 million tax benefit, which would become available again if it were to be profitable and as long as at least 50 percent of the company remains in the same hands in the meantime.
On a normal operations basis, the company lost $500,000 in the six months to Sept. 30, the same as for the same period last year, but reported a net loss of $2.5 million for the period once the tax benefit writedown is included.
Directors warned shareholders the tax benefits could not be revived unless a 49 percent minimum continuity of shareholding was kept "between the beginning of the period in which the associated tax losses were earned and the end of the period in which they are offset."
A total of $7.7 million of accumulated tax losses have 50 percent continuity of shareholding, although gross tax losses of around $3 million would still be available if continuity of ownership were lost, the company said in a statement.
Energy Mad shares dropped 4 cents to 25 cents when trading opened on the NZX this morning. The company listed in a barely supported $5 million float in October 2011, listing at $1 a share. It has consistently missed prospectus forecasts and suffered NZX censure last month over late profit warning disclosures in January last year.
Operating revenues for the period were $4 million, compared with $4.5 million in the same period a year earlier, with New Zealand sales improving while sales in the US collapsed from $1.6 million in the prior period to $100,000.
"The nature of Energy Mad's business means that there is considerable uncertainty around the timing and size of orders from major customers."
To take greater control of its own destiny, Energy Mad was now putting greater effort into its New Zealand-based installation business, which does not require the involvement of third party partners.
Much of Energy Mad's experience and potential has been said to lie in its ability to partner with electric utility companies to offer heavily discounted high-cost energy efficient lightbulbs. However, efforts in the US and Australia have been dogged by poor sales and, in Australia, product registration difficulties, although these are now resolved.
"The main driver of Energy Mad's growth in the short term will come from an accelerated scale-up of the Direct Installation business in New Zealand," the company said.
It gave no earnings guidance for the full year with today's half year accounts.
New Zealand sales for the half year totalled $1.45 million, while Australian sales were $2.0 million.