Wellington Drive sees profit in 2013, first since listing

Wellington Drive sees profit in 2013, first since listing for NZ fridge motor company

By Hannah Lynch

May 16 (BusinessDesk) - Wellington Drive Technologies is forecasting a profit in 2013, the first since listing on the NZX in 2001, as its turnaround cost cutting drive starts to widen the margin on sales of its energy efficient refrigeration motors.

The Auckland-based company achieved its revenue target of $11.5 million in the first quarter 2012, Greg Allen, chief executive told shareholders at their annual meeting today.

"Quarter one 2012 was our first indication that some of our action plans are focused on the right things, with our performance versus our financial plan showing a good start to the year," Allen said.

Last year, the company announced it was embarking on various capital raising initiatives to keep the business afloat as it struggles to achieve profitability. It launched a restructuring program designed to reduce costs and improve cash flow.

"This turnaround plan drives a more disciplined approach to growth in our core refrigeration market and in particular a shift from building scale, to a sharp focus on profitable growth from selected customers," said Tony Nowell, chairman.

"We expect continued organic growth from our existing commercial refrigeration customers and are seeing the business quoting on several new customer projects in America and Europe," he said.

Wellington Drive expects its turnaround plan to deliver total revenue of NZ$40 million in 2012, up from $35 million last year. It also signaled a gross margin run of 17 percent by the end of the fourth quarter.

In February, the company posted a net loss of $14.7 million for calendar 2011, little-changed from the loss of $14.8 million a year earlier. Operating costs increased to $13.3 million from $12.6 million.

Wellington Drive shares have shed 19 percent this year, closing the day on 18 cents.

(BusinessDesk)

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