Wellington Drive reports 25% revenue growth, a loss of $14.5 million, and $10.9 million improvement in cash flow
Wellington Drive Technologies Limited summary for the 12 months to 31 December 2011
· 25% growth in operating revenue to $35 million
· A loss of $14.5 million compared with a loss of $14.8 million the previous year
· Operating cash flow improved from -$17.4 million to -$6.5 million
· Achieved an improved underlying gross margin to 11%
· Inventory reduced by $3.3 million to $10.9 million
Company growth and structure
· New CEO, Greg Allen, an experienced international supply chain and operations executive, appointed in November 2011
· Commenced a restructuring program that is delivering significant cost reduction, inventory reduction and cash flow improvements
AUCKLAND: Wellington Drive Technologies Limited (NZX: WDT) today reported its results for the 12 months to 31 December 2011, with 25% revenue growth to $35 million and a loss of $14.5 million compared with a loss of $14.8 million for the previous year.
This result included non-recurring costs of $5.2 million, reflecting inventory provisioning and restructuring items related to the previously disclosed wind-down of the company’s ventilation business, rationalisation of the refrigeration product range and changes to the group’s organisational structure.
Greg Allen, Wellington’s new CEO, who was appointed in November, said that while the loss was disappointing, the 25% growth in operating revenue to $35 million reflected continued strong demand for the company’s energy-saving electric motors.
There was also wider acceptance of the product range by key international customers, with the company focussing on developing stronger, long term customer relationships in the most profitable markets and five key improvement initiatives to put it on track to achieve a positive result in 2013.
“This has been another tough year but nevertheless we are focussed on our planned improvement initiatives: to complete our ventilation business exit, improve supply chain performance, reduce our inventory needs, reduce our costs and develop deeper customer relationships to make real gains in turning around the business,” he said.
“We reduced inventory by $3.3 million and believe we will make further reductions, and importantly we changed focus from seeking aggressive revenue growth and scale-up of operations towards a more disciplined approach to growth in markets that deliver the most benefits.”
Underlying margins had also improved as the company growth continued in its higher margin refrigeration products. The company is encouraged by customer feedback on the importance of having the Wellington brand in their end products.
Mr Allen said their objectives for 2012 were to demonstrate further gross margin improvement to approximately 17% by Quarter Four, improve inventory turns and to stabilise the cash position to ensure self-sustainability without requiring further capital.