Trilogy turns to 1H profit as Ecoya posts positive earnings

Trilogy turns to a 1H profit as Ecoya posts positive earnings; shares jump

By Tina Morrison

Nov. 27 (BusinessDesk) - Trilogy International, the skincare and scented candle company, turned to a profit in its first half as a boost in sales for its Ecoya range in Australia helped the unit reach profitability. The shares jumped to a two-month high.

The Auckland-based company posted net income of $984,000, or 2 cents a share, in the six months to Sept. 30, from a loss of $269,000 a year earlier, it said in a statement. That's above the company's forecast for a profit of $860,000 made at its annual meeting in September. Sales rose 12 percent to $15.3 million.

Trilogy's improved performance was driven by its home fragrance and body care brand Ecoya, which makes up 42 percent of sales, turning to a profit in the first half. The company said it expects Ecoya's profitability would continue to improve in its second half. Meantime, its natural skincare brand Trilogy also improved earnings, posting increased sales in all its major markets.

"The strong result reflects sound performance by both the Trilogy and Ecoya brands over the period," said chief executive Stephen Sinclair.

Both brands have continued to trade well since balance date, with initial Christmas sales for Ecoya ahead of the year earlier period, he said.

The company's shares jumped 7.8 percent to 69 cents, their highest since Sept. 25, making the stock the second-best performer on the NZX All Index today.

Ecoya posted earnings before interest, tax, depreciation and amortisation of $58,000 in the first half, from a loss of $569,000 a year earlier, the company said. Sales in Australia, which account for two thirds of total sales, increased 18 percent to $4.3 million, while New Zealand sales rose 13 percent to $1.5 million. That helped Ecoya turn to positive earnings in Australia of $153,000, from a loss of $169,000 a year earlier, while the brand's New Zealand earnings jumped to $181,000 from $32,000.

Ecoya has yet to post a profit in its other main markets of the US, UK and Ireland. Revenue from the US slumped 98 percent to $5,000 from the year earlier period, while sales in the UK and Ireland markets more than doubled to $131,000 from $50,000, it said.

Ebitda for the Trilogy brand more than doubled to $2.1 million, from $964,000 a year earlier. The brand's Australian sales jumped 24 percent to $3.1 million, while New Zealand sales rose 3 percent to $2.9 million. US sales gained 19 percent to $76,000 while revenue from the UK and Ireland jumped 31 percent to $1.1 million.

The Trilogy unit turned to a profit in Australia in the first half, posting Ebitda of $689,000 from a loss of $163,000 in the year earlier period, and it also turned to a profit of $66,000 in its UK and Ireland markets, from a loss of $175,000 a year earlier. Earnings for the brand in New Zealand slid 16 percent to $1.1 million, while its US loss widened to $93,000 from $13,000.

The company won't pay a first half dividend.

The company, which is 49 percent owned by The Bakery Business, changed its name from Ecoya to Trilogy in June last year to reflect the growing dominance of the skincare brand. Ecoya bought Trilogy in 2010 for some $19.2 million, with $10 million upfront and $9.2 million in cash and scrip based on earn-out targets.

(BusinessDesk)

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