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Ecoya revenue up 176 per cent

Ecoya Announces Trading Result for the Six Month Period Ended 30 September 2010
November 24, 2010

Key Highlights
• Revenue for the half year of NZ$4.4m compared with NZ$1.6m (+ 176%) in the same period last year. This included one month of Trilogy trading.

• Significant growth in the number of stores stocking Ecoya, with over 1400 worldwide.

• Operating loss of NZ $2.0m. When including non-recurring items such as acquisition and listing costs the full reported loss is $2.6m, which is in line with prospectus forecasts.

• Ecoya confirms guidance that it is on track to meet those statements outlined at the time of IPO in May 2010.

• In addition, the acquisition of Skincare company Trilogy on September 1, will significantly increase full year revenue and decrease the full year loss from what was forecast in the prospectus.

• Trilogy currently has 3500 accounts worldwide, presenting significant distribution opportunities and synergies with the existing Ecoya business in the future.

Further commentary

Ecoya continued to grow both same store sales and to grow the number of stores. In Australia Ecoya is sold in over 1000 stores including David Jones. In New Zealand Ecoya is ranged in over 250 stores including Smith and Caughey and leading Living and Giving and Farmers Stores. In the US, 100 stores including 8 Bloomingdales Department stores and Four Seasons Beverly Hills stock Ecoya. In key Asian cities there are over 50 stores, including Lane Crawford department stores in Hong Kong and Beijing.

Home Fragrance, Body and Bath and Natural skincare categories continue to be one of the fastest growing retail categories worldwide.

The acquisition of Trilogy offers a further extension into the complementary skin care category. Ecoya Executive Chairman Geoff Ross states, “Ecoya has a beautiful range of home fragrances brought to life through its candles, melts, oils and diffusers now complemented by a range of body pampering soaps, moisturisers, creams and lotions. Trilogy’s products are designed to care for and rejuvenate the face and body with its award winning range of skin care formulations. The brands have a very similar consumer proposition.

”We believe both businesses have a lot to gain from each other. There are also geographic advantages to the acquisition – Ecoya’s strongest presence is in Australia, Trilogy in New Zealand. Trilogy has a growing presence and reputation in the UK and Ireland while Ecoya hasn’t yet launched here. Similarly, Ecoya has established a beachhead in the US market whereas Trilogy has not yet entered the US.

“The complementary product range, the complementary geographic markets and distribution strategies, the opportunity for synergies and sharing of intellectual property and experience, have presented Ecoya with a unique opportunity to step change the Ecoya business and accelerate growth. This will enable the business to reach profitability earlier.”

Ecoya will be expanding its product range further into body and bath, with the addition of 5 new products over the next three months. Body and Bath is a significantly larger category than Home Fragrance.

Geoff Ross says “The extension of the product range to position Ecoya as a full Home Fragrance and Body and Bath provider was always a natural step for Ecoya. People become attached to certain fragrances and not only want these in their living room, but also in the bath and shower. This will complete our offering, and accelerate sales growth through existing stores and enable further penetration of the Ecoya product range into new stores.”

As the company grows, efficiencies are gained in the production process. The company believes there will continue to be gains in gross margin as volumes increase. The company has recently moved to a larger facility and new automated production equipment is being installed early in the New Year.


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