Charlie's forecasts bigger-than-expected loss

Tuesday 14th July 2009

Charlie's Group, the unprofitable juice-maker formed by Simply Squeezed founder Stefan Lepionka and entertainer Marc Ellis, expects to post a bigger-than-expected full-year loss as a drop-off in New Zealand sales outweigh growth in Australian markets.

The Auckland-based owner of Charlie's and Phoenix Organics brand drinks forecasts a net loss of between $1.8 million and $1.95 million this year, with domestic sales declining 2%, rising costs of raw materials, and increased discounts on some items.

The company posted a $661,000 loss for the six months ended December 31, and expected a similar result for the second half.

"Charlie's has not escaped the substantial softening in consumer spending experienced by the retail market in New Zealand," said chief executive Lepionka in a statement. "We have taken the necessary steps to tighten our operating costs in the New Zealand businesses" and expect to see improvements in the next financial year, he said.

Since the company listed in 2005, it has pursued an "investment for growth" strategy under which total liabilities stood at $10.6 million at December 31 with borrowings of $6.6 million.

The shares fell as low as 8 cents in late March, and recently traded at 10 cents on the NZX.The stock reached 25 cents in January 2007.

The company raised $370,000 after option issuance expired yesterday, and issued 3.7 million shares.

Charlie's installed cost saving measures in the three months ended June 30, but hasn't commented on the success of the initiatives.

Sales in Australia jumped 31% this year, with business across the Tasman making up 15% of the company's total earnings. It expects Australian revenue will match New Zealand's in the next five years.

Businesswire.co.nz

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