Energy Mad narrows first-half loss; shifts focus to LED bulbs

Energy Mad [NZX: MAD], the energy efficient lightbulb marketer, narrowed its first-half loss after a year earlier impairment washed through, though widened its operating loss on flat sales and as it shifts focus to LED lightbulbs.

The Christchurch-based company reported a loss of $1.3 million in the six months ended Sept. 30, from $2.6 million a year earlier, the company said in a statement. Sales were little changed at $4 million, while its operating loss widened to $1.2 million from $500,000 a year earlier as a result of one-off transitional costs to its new sales strategy.

Energy Mad is focusing on LED ecobulbs and a direct to consumer approach, after last year recognising a $1.4 million impairment on the value of its research and development for its older compact fluorescent lamps. The company reduced first-half administration and general expenses 5 percent to $1.6 million, while its selling and distribution expenses rose 50 percent to $1.2 million.

"The larger operating loss was as a result of the one-off transitional costs in shifting Energy Mad's strategic focus to a new LED sales model, developing new LED Ecobulbs and moving from providing significant in house services to outsourcing its operations to third party sales forces," the company said. "As a result of its recent reorganisation, Energy Mad has a leaner organisational structure to focus on its direct to consumer ecobulb LED sales model utilising outsourced sales forces."

In the six month period, Australian sales were unchanged at $2 million, while New Zealand sales were little changed at $1.4 million, from $1.5 million a year earlier. US sales rose 40 percent to $183,351.

The company has suffered a series of setbacks since its IPO in 2011, consistently missing prospectus forecasts. In October last year the company was fined $30,000 by the NZX for not issuing a profit warning soon enough.

The shares last traded at 16 cents and have fallen 33 percent over the past 12 months. The share price surged in January to reach 69 cents after the light bulb maker announced deals with online retailer Amazon and retail chain Walgreens to sell its bulbs in the US market before falling on issues of stock availability.

(BusinessDesk)