Ecoya on track to deliver strong result

NZX announcement

MARKET ANNOUNCEMENT

Ecoya on track to deliver strong result

Ecoya Limited (NZX:ECO) has almost completed its first financial year as a listed company. In its prospectus registered on 25 March 2010 and before the acquisition of Trilogy, Ecoya forecast revenue of $7.9m and a loss of $5.2m.

Prior to audit, indications are that Ecoya, in its first year as a listed company, will finish the March 2011 year with revenue of around $13.8 million.

The group anticipates it will make a loss of approximately $4.0 million after listing expenses of $500,000 and Trilogy acquisition expenses of $170,000. The projected loss of $4.0m is before the $400,000 non-cash IFRS accounting charge to unwind the present value discount on the Trilogy acquisition contingent consideration.

The group also anticipates that for the new financial year commencing April 1, sales should exceed $20 million and that the group will be in profit. Some recent months have been profitable although the better months are skewed towards the end of the calendar year.

A contributor to this result has been the integration of Trilogy into the Ecoya business. Trilogy is helping to accelerate the company’s revenue growth and the move towards profit. Trilogy and Ecoya as business units are both in growth.

The fully audited result is to be released in May 2011.

Taking into account current banking facilities, the company does not expect to have a requirement for further capital raising based on current forecasts.

Ecoya is currently rolling out an extensive bodycare range, giving the group a full offering of home fragrance, bodycare and skincare products. The bodycare category is worth US$22 billion worldwide and is in growth.

Executive Chairman Geoff Ross states: “While I am aware that various members of the retail sector are experiencing tough trading conditions, Ecoya continues to grow, both in same store sales and in gaining positions within new stores. In the US we have moved from being in eight Bloomingdales department stores to 20 of their stores. And we have secured accounts such as Four Seasons Hotels and Hollywood Fashion Store – Fred Segal.”

Ecoya’s Body Nourisher won best new product in its division at the prestigious New York Gift Fair. Ecoya has also recently featured on KTLA’s (Los Angeles television station) ‘Hot list’, E! News, Access Hollywood and hollywoodlife.com.

Australia is the company’s largest market. Sales are building in larger chains such as David Jones and also in the smaller premium gift stores.

In New Zealand the full Ecoya range is now stocked by all Redcurrent gift stores and the two companies will be working together on innovative merchandising and marketing solutions and in-store education that can be rolled out for use in other gift store chains in Ecoya offshore markets. The range is generating the highest sales of any bodycare and home fragrance brand the retail chain has stocked.

The Trilogy brand is growing in European Markets such as the UK and Ireland, while Ecoya is building a beachhead in the US and several cities in Asia. Synergies in operating the two brands will continue to be delivered next year.

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