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New Image sees return to annual profit on rising sales

New Image Group, which makes colostrum-based health tonics, expects a big turnaround in full-year earnings, with sales tipped to exceed $100 million, chairman Graeme Clegg says.

The Auckland-based company sees pre-tax profit of between $12 million and $14 million in the year ending June 30, 2013, turning from a pretax loss of $4.8 million in 2012 and at least 2.5 times the pre-tax profit of $4.7 million in 2011, Mr Clegg told shareholders in Auckland today.

"I can confirm that the new financial year has started strongly and we are well ahead of the previous year," he says in speech notes published on the NZX. "However, as we know from experience that market conditions in our industry can change – and quickly."

Last month New Image flagged annual revenue would exceed $100 million after turning a pre-tax profit of $3 million in the three months ended September 30.

Clegg, who recently agreed to buy the 10.1% stake held by HWM (NZ), formerly known as Huljich Wealth Management, says the company will be looking at new opportunities and is mulling whether to extend its direct selling into Vietnam.

New Image has increased its exposure to Asia as developing nations' appetite for dairy protein grows and has previously singled out Malaysia as a growth target.

Mr Clegg paid tribute to Malaysia-based director and Asia Pacific vice-president NH Chua, who was paid out $1.3 million in compensation after an aborted listing in Asia. Mr Chua was in line to receive a 5% shareholding if the listing had gone ahead.

The shares are unchanged at 30 cents and have climbed 45% this year.

(BusinessDesk)