Charlie's Group has cranked up production from its Australian plant in order to meet additional orders from supermarket giant Coles, a contract which it says could potentially double the size of the beverage maker's Australian business.Charlie's said it h
Charlie’s Group has cranked up production from its Australian plant in order to meet additional orders from supermarket giant Coles, a contract which it says could potentially double the size of the beverage maker’s Australian business.
Charlie’s said it has been working hard to keep up with the additional volume, having received a third order for $A500,000 worth of product last week.
“Production-wise, we have the ability to make all the additional volume from the Renmark facility,” Charlie’s chief executive Stefan Lepionka said in speech notes for today’s annual meeting in Auckland.
“So we’re expecting a margin improvement from Australia in this current year.”
Charlie’s is forecasting gross sales of approximately $21 million for the December 2011 half year, with earnings before interest, tax, depreciation and amortisation (ebitda) of $2 million.
The company reported ebitda of $3.4 million in the year to June 30, 2010.
Last year Australia sales accounted for 22% of total turnover. The company is expecting this proportion to increase to 38% for the half year.
“While the contract presents the potential for a doubling of Australian sales it’ll take some months to get to that point,” Mr Lepionka said.
At June Charlie’s had cash on hand of $1.7 million and term debt of $3.3 million.
Chairman Ted van Arkle said the board had decided against paying a dividend.
Mr Lepionka hinted that the company was pursuing contracts with other Australian suppliers, possibly with Woolworths.
“The Coles contract doesn’t preclude us medium term from signing with other nationwide retailers and we will still continue to present to other retailers to grow the brands profile even further.”
Charlie’s launched in Australia two years ago.
The Coles contract includes Charile’s Old Fashoned lemonade and the brand’s Spirulina Smoothie.
Charlie’s needs to squeeze around four million extra lemons every year – a 300% increase - just to meet the demand for its Old Fashioned Quencher range.
