Sealegs has finally floated into profitable waters, with the boat builder recording an operating profit of $642,000 for the year ending March.
The result follows an $869,000 loss in the previous year and is a turnaround from the $789,000 loss for the six months ending September, despite total revenue staying flat at $11.4 million.
Sealegs chief executive David McKee Wright said the result was attributable to the company’s changes in sales strategy and a 15% reduction in operating and cash expenses.
He said the company widened its strategy by targeting the amphibious boat opportunities in both the recreational and commercial market segment, with particular success in the latter sector.
The company is forecasting future growth in the rapid response amphibious rescue vehicle market that had been highlighted by flooding in areas such as the Philippines, US, UK and Malaysia.
Mr McKee Wright said this area had seen a $2 million boost in revenue and a strong growth rate.
Sealegs is currently negotiating sales with the Malaysian Ministry of Defence, Malaysian Fire Department, Indian Police Department Royal, Thai Navy and the Bangkok City Council, according to Mr McKee Wright.
“Sealegs is patented technology which means we do not have any direct competition. Because of this, when the company is engaged in a government purchasing cycle, we’re assured a strong chance of success.
“The commercial sales strategy sheltered Sealegs from the devastation within the marine market as a result of the economic environment. Where most companies involved in the marine market have seen drastically reduced revenue results and restructuring, Sealegs has been able to grow market sectors and more importantly become profitable.”
The total revenue for the year was down $0.1 million on last year’s $11.5 million, but Mr McKee Wright said Sealegs revenue performance was still “well above” the overall marine sector’s performance, with gross margin growing from $4.3 million to $5.1 million
Its operating cashflow for the year of $518,000 was a 152% increase in the previous 12 months, with the company holding $2.7 million in cash and $1.1 million in receivables at balance date.
The company recently took a six-year lease in a North Shore industrial development owned by listed ING Property Trust.
Sealeg’s share price (NZX: SLG) was up 1c to 18c at lunchtime in the wake of the profit announcement.
Tue, 11 May 2010