Certified Organics Half Year Result
August 9, 2002
Certified Organics Half Year Result In Line With Expectations
Statement made by Dr Earl Stevens, Managing Director
Certified Organics unaudited operating loss of $1.2 million for the six months ending 30 June 2002 is in line with directors’ expectations.
Revenue during this establishment phase was $97,000, as we put our emphasis on assembling toxicology data, conducting field trials, progressing regulatory approvals and creating a comprehensive New Zealand distribution network in preparation to commercialise our patented organic weed killer, Organic Interceptor™.
Early on we made the self imposed decision to withhold marketing of Organic Interceptor™ until the 2002 spring season, and this had a material impact on sales. In the first six months sales averaged a little over $16,000 a month.
Marketing commenced in mid-June when we introduced our home and garden range of Organic Interceptor™ weed control products in premixed, ready-to-use packs to hardware chains and gardening outlets.
Total sales for the Company in July were in the region of $60,000. Post August, we anticipate sales to increase progressively as our marketing increases and consumer demand grows.
During July we made our first sale of four tonnes of organic hair shampoo to Australia.
We are expecting income for the full year to be in excess of $1 million. The end of year result should be in line with the forecast given at the annual meeting, where we talked in terms of an operating loss for the full year in the order of $1.7 million.
While Certified Organics is still in its establishment phase, with the start of the spring season we are now starting to see improving revenue flows as we sell the Organic Interceptor™ weed controller product range into the New Zealand hardware, garden and retail outlets, supported by a full promotional programme.
For the first six months expenditure was $1.3 million which included $208,000 on research and development activities, and a goodwill write off of $277,000.
At period end the Company had cash reserves of $158,000 and total borrowings of $243,000 of which $202,000 represents loans from shareholders.
In April the Company appointed Northington Partners to manage the process of raising up to $6 million through private share placements, an initiative which was subsequently approved at the annual meeting.
Presentations have been made to a number of potential overseas and New Zealand based investors, and these have been well received with particular interest being shown in the Company’s North American and European plans. The Board will keep shareholders informed of all developments as they occur.
Since the annual meeting in June, the Company has appointed Singaporean based distributor Pacific Agriscience Pty Limited to market and distribute Organic Interceptor™ to key Asian markets.
The directors have taken the decision to address the number of shares on issue by announcing a 100 for 1 share consolidation, effective 5 pm 23rd August 2003. This will reduce the shares on issue from 2,385 million to 23.85 million.