Energy Mad drops forecast again

Chris Mardon, co-founder of Christchurch-based company Energy Mad. Photo / Dean Purcell

Energy Mad - the energy-efficient light bulb maker - says it is now looking at a loss for this financial year rather than the profit that it forecast in its prospectus, but says it's on target for a turnaround next year.

It was the second downward earnings revision for the tiny Christchurch-based company in just over a month.

In January, Energy Mad revised its March, 2012 year ebitda (earnings before interest, tax, depreciation and amortisation) forecast to $1.1 million from $3.5 million as a result of delays in both the manufacture of its new Ecobulb downlights in China and in gaining accreditation for its spiral ecobulb in Australia.

The company said production of the downlights, used as an alternative to halogen bulbs in recessed fittings, would reach full capacity by the end of this month and Australian accreditation was achieved on February 21.

Energy Mad chairman Rick Ramsay said the company's business was project-driven and its revenues were "lumpy" as a consequence.

Since late 2011, Energy Mad had been working with a substantial customer in a key overseas market. Both sides thought negotiations would have concluded in time for an initial stocking order to be delivered before March 31. Earnings from that order (of $1.8 million) were included in the guidance given to the market in January, Ramsay said in a statement.

Energy Mad was now unlikely to recognise any revenue from the order in 2011/12 and had revised its guidance accordingly.

"While we are disappointed with this situation, it's still too early to say if or when this order will be secured."

But Energy Mad had sufficient cash reserves to carry out its plans. Ramsay said and the company remained "committed to delivering its 2012/13 forecast in full".

Managing director Chris Mardon said sales of the company's downlights in New South Wales had been successful and the same was expected in Victoria.

Energy Mad's $1.00 shares listed on the NZX last October at a 5c premium, then steadily fell back. They last traded at 58c a share.

The company raised $5 million from its IPO after having NZX rules on shareholder minimum waived and the deadline extended by two weeks.