Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Woosh posts annual loss as costs mount, will need more cash

Woosh posts annual loss as costs mount, will need more cash from parent

By Paul McBeth

March 4 (BusinessDesk) - Woosh Wireless Holdings, the local internet service provider, posted a loss in the 2013 financial year and will need more cash from its unprofitable Californian parent, Craig Wireless Systems, to meet future cash-flow requirements.

The Auckland-based company made a net loss of $2.59 million in the 12 months ended Aug. 31, 2013, compared to a loss of $2.39 million in the 10 months ended Aug. 31, 2012, according to financial statements lodged with the Companies Office. Woosh made an operating loss of $1.45 million on sales of $16.1 million. It held cash and equivalents of $448,000 as at Aug. 31.

The losses decreased Woosh’s cash resources and indicated a “material uncertainty that may cast doubt about the ability of the group to continue as a going concern,” according to a note to the accounts. Craig Wireless intends to provide additional support and won’t require repayment of almost $7 million in shareholder loans, it said.

“Ongoing operation and cost improvement initiatives are underway to reduce operating losses,” the accounts said. “However, it is forecast that further cash injections will be required in order for future cash-flow requirements to be met.”

The accounts were tagged by new auditor William Buck Christmas Gouwland over Woosh’s ability to continue as a going concern because of the company’s losses and net liabilities of $2.44 million, though they didn’t qualify their opinion.

Woosh and Craig Wireless president Gary Birkland said the parent company has “committed management resource and continue to financially support Woosh to ensure that it is able to fulfil its potential in the New Zealand wireless broadband market.”

Craig Wireless bought 51 percent of Woosh for US$5.5 million in 2011 in a deal to satisfy $20.6 million of debt owed to then-investor Kuwait Finance House. The following year it lifted its stake to 75 percent with an equity injection of US$1 million.

TSX-listed Craig Wireless has its own issues to continue as a going concern, with accounts for the three months ended Nov. 30 showing the telecommunications company obtained a US$2 million loan from chief executive Boyd Craig and was holding “active negotiations with other potential sources of third party financing as required in the cash flow model.”

At the time, Craig Wireless said the financing hadn’t been completed, and “would materially impact the company if the funding is not available.”

Woosh’s parent company made a loss of C$10.7 million on sales of C$13.5 million in the year ended Aug. 31, and reported a loss of C$1.9 million on sales of C$3.2 million in the three months ended Nov. 30. It held cash resources of C$898,000 as at Nov. 30.

The New Zealand assets were valued at C$8.57 million as at Nov. 30, making up the bulk of Craig Wireless’s almost C$12 million in non-current assets.

Last year, Craig Wireless subsidiary Craig Wireless New Zealand Spectrum Operations bought management rights for an additional 35 megahertz in the 2.3 gigahertz range in New Zealand from state-owned Kordia for $2.2 million.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news