Charlie's expects 43% jump in first-half profit

Charlie's expects 43% jump in first-half profit; may pay maiden dividend

Nov. 22 (BusinessDesk) - Juice and soft-drink company Charlie's Group expects first-half net profit will rise 43% as sales climb by about a quarter, it told shareholders at their annual meeting. The shares jumped 9.4%

Chairman Ted van Arkel says gross sales for the six months ending December will be about $21 million, “given the tremendous growth in Australian sales and with New Zealand keeping steady.”

Van Arkel says Australian sales accounted for 22% of total gross sales in the year ended June 2010 and he expects they will account for 38% in the first half this year.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the six months is expected to be $2 million and net profit $1 million, he says.

Managing director Stefan Lepionka says a key reason for the surge in Australian sales is a contract with supermarket operator to stock Charlie's Old Fashioned Lemonade and a further 10 of its products in all 750 of its supermarkets in Australia from early November.

Before that, Charlie's had been trialling some of its range in 27 Coles stores.

“The Coles contract will significantly lift the brand profile and we're seeing that reflected in each week's sales,” Lepionka says.

Van Arkel says the sales outlook for Coles makes it difficult to predict the full-year result but the company expects growth to continue in the second half.
Dependent on the full-year results and future cash flow requirements, the board will consider paying a maiden dividend after the second half, van Arkel says.

Charlie’s, which has now been listed for five years, reported a bottom line net profit for the year ended June of $2.5 million compared with a $1.8 million net loss the previous year. The latest result included a $1.2 million profit from the sale of its Henderson factory.

Charlie's shares rose 1.4 cents to 16.3 cents in morning trading. The have traded between 7.5 cents and 16 cents over the last 12 months.

(BusinessDesk)

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