Certified Organics 04 Full Year Preliminary Result
Certified Organics 2004 Full Year Preliminary Result
Statement made by David Warrick, Managing Director, Certified Organics Limited
Certified Organics has released its unaudited trading results for the year ended 31 December 2004, announcing an operating loss reduced to $1.34 million from $1.53 million in 2003, from sales of $0.89 million, up some 18% on the previous year.
The Company recorded an encouraging export sales performance, primarily to Australia, where sales topped $0.5 million, from a nearly standing start.
The initial Australian retail launch of Organic Interceptor™ weed killer and mould control products and the sales to the government of South Australia for its Branched Broomrape eradication project mean that Certified Organics is no longer solely dependant upon New Zealand for its revenue stream.
The development of the Company’s export sales proved particularly important this year in view of the disappointing sales result from the New Zealand retail market, where sales suffered from deficiencies in the quality of the distribution, compounded by the very poor spring and early summer weather.
The Company’s products – notably Organic Interceptor™ weed killer - continue to attract interest from the commercial agricultural market. This investment in product research and trialling accounted for some $0.35 million of the Company’s expenses in the year and continues to lay a platform for commercial market sales in New Zealand and overseas, as distribution arrangements become established.
2003 Audited Revenue $0.89 million $0.75m 18% increase Note:2003 sales revenue benefited by some $0.27m for sales the Company made directly to retailers before the appointment of the NZ master distributor in mid 2003. The 2004 sales performance reflects an 85% growth on a “like for like” basis.
Cash loss $-0.75 million $-0.91m Reduced by 18% on previous year Pre-tax loss $-1.34 million $-1.53m Reduced by 12% on previous year. After charging $594,000 of non-cash depreciation and amortization
Prospects for 2005
In Australia, the Company looks forward to further penetration of the retail market in 2005, together with growth in the South Australian government’s programme to eradicate the noxious weed - Branched Broomrape. Sales to this programme were worth some $0.3 million to Certified Organics in 2004. Current indications are that the extent of use of the Company’s products will be expanded in 2005.
In New Zealand, the Company is working with its distributor to upgrade the approach to marketing. This, together with the launch of product range extensions will lead to an improved sales performance in our home market in the forthcoming year. Late season sales into the New Zealand commercial agricultural market have been strong in the first two months of the New Year.