Blis Technologies takes provision over safe but ugly product
The company launched an investigation into the product line this week.
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Probiotics product maker Blis Technologies [NZX: BLT] has taken a $350,000 provision for a speckled discolouration of a lozenge product line in Europe.
However, the company has retained its expectations to double annual revenue, saying the product is safe and no other markets are affected.
The Dunedin-based company launched an investigation into the product line this week, halting trading in its shares, after it found a quality problem in one of its product lines.
It says a particular formulation for one European customer found extreme humidity created speckling of the product, which "remains safe although cosmetically unacceptable." Blis is working with the customer to improve the production and transportation of the line, and will manufacture some lozenges in Europe as a short-term solution.
The company will take a provision in its first-half result against the additional costs of replacing the product, but affirmed annual revenue guidance to rise by more than 100% to at least $5.3 million.
The company still intends to expand product sales in Japan and Australia later this year.
"The underlying science behind Blis products is unquestioned and backed by clinical trials," the company says. "The problem does not affect product developed for other markets such as US, Japan and China."
The shares fell 7.7% to 2.4c after they resumed trading today, having gained 37% this year.
(BusinessDesk)
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Paul McBeth
Wed, 04 Nov 2015
Wed, 04 Nov 2015
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
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Blis Technologies takes provision over safe but ugly product
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