Expansion into Australia has helped juice maker Charlie's Group post its first interim profit after years of losses, with the beverage company reporting a better-than-expected net profit of $1.9 million.The profit for the six months ended December –
Expansion into Australia has helped juice maker Charlie’s Group post its first interim profit after years of losses, with the beverage company reporting a better-than-expected net profit of $1.9 million.
The profit for the six months ended December – which compares to a loss of $700,000 in the same period last year – does include a $1.2 million one-off capital gain, but is still stronger than the company’s guidance suggested just last month.
Operating ebitda for the December half year was $1.75 million, excluding the gain on sale of its Henderson property, which was also ahead of guidance and follows an ebitda loss of $100,000 in the first half of the 2009 year.
While there has been a decline in sales in its New Zealand operations, Charlie’s is now starting to reap the rewards of moving into Australia, with gross sales surging by 37% to $3.3 million and 60% of the company’s total earnings now generated across the Tasman.
The company launched the Charlie’s brand in Australia 14 months ago, with a particular focus on hotels, restaurants and cafes, although it has reported positive progress in penetrating the Cole’s chain of grocery stores in Victoria and New South Wales.
Chief executive Stefan Lepionka said the company was expecting even stronger growth from its Australian operations.
“We have worked hard to establish ourselves as an Australasian manufacturer and marketer of premium beverages. Although it has not been a smooth ride at times, we are pleased that our strategy is beginning to show the benefits that we set out to achieve.”
The news is not quite as good closer to home, with Mr Lepionka confirming that the New Zealand market remained "uncertain".
The company has attributed the decline in New Zealand sales to its own product rationalisation programme, the economic climate and the discontinuation of the Redbull distribution agreement,
The deletion of non-performing product lines has seen a marginal loss in volume, but the company said it was on track to add to its profitable portfolio to replace the sales it lost.
With its first positive cash flow in this period and the proceeds from the Henderson property sale, the company had beefed up its balance sheet by reducing debt from $7.1 million to $4.3 million over the six months, halving its gearing ratio from 53% to 27% over 2009.
The company confirmed last week that another $500,000 will be sliced from its debt at the end of this month, while also revealing it had has successfully negotiated the release of the $5.3 million guarantee that had been given to the bank by Collins Asset Management.
Chairman Ted van Arkel said the results reflected a concerted effort by the group to restore performance, drive efficiencies and contain costs during difficult and uncertain economic conditions.
“We remain focused on monitoring costs and production efficiencies to ensure resources are deployed in the most cost-effective manner, while still driving sales and brands to increase market penetration and generating positive cash flow.
“While we cannot ignore the volatility of the economic climate, the directors remain confident that strong demand for the company’s brands will continue and as the economy recovers further we will be well placed to take advantage of that recovery.”
