New Image shares climb to 12-month high on bullish sales forecast
BUSINESSDESK: New Image Group, which makes colostrum-based health tonics, expects annual sales will beat $100 million after its Malaysian business underpinned a strong first quarter result and helped push the shares to a 12-month high.
The Auckland-based company turned a pre-tax profit of $3 million in three months ended September 30, compared to a loss of $1 million a year earlier, it says in a statement.
Sales grew 83% to $31.7 million in the quarter and New Image expects to post more than $100 million in annual sales. The shares jumped 50% to 24 cents, the highest level since October last year.
"There are still risks associated with our revenue forecast, and we continue to monitor the key markets," chairman Graeme Clegg says. "If the first quarter's revenue performance continues for the remainder of the year, we would expect to announce a profit well up on the previous year."
New Image made an annual loss of $6.1 million on sales of $74.7 million in the year ended June 30, which included a $2.3 million impairment charge on its Living Nature skincare brand and its sleep-enhancing milk powder, Sleep Time.
The company's failed relationship with Natural Dairy also resulted in a $1 million inventory charge, while the wind-up of the company's executive share scheme had a one-off cost of $600,000.
New Image also paid out $1.3 million in compensation to Asia Pacific vice-president Nam-Hoat Chua, who was in line to receive a 5% shareholding if the listing of the Malaysian and other entities had gone ahead, according to the company's annual report.
That made Mr Chua the highest-paid employee in the year, with some $2 million in remuneration and other benefits. He held a 2.3% stake in New Image as at September 3.