Wellington Drive forecasts bigger loss

Wellington Drive Technologies is projecting a full-year loss of $11.45 million and is progressing plans to introduce a cornerstone shareholder.

The projected loss for the year to December 31, 2009 is $1.7m more than the company projected in January.

In a trading update today ahead of its annual meeting on June 16, the company outlined a range of issues that had arisen in its first half.

"The board and management continue to target the company trading profitably over 2010," the company said.

The company makes energy saving motors and fans for the refrigeration, ventilation and appliance industries.

The matters outlined included having to pick up an unbudgeted cost of a revision to software for motors supplied to major customers.

Gross margins were affected by higher freight costs and stock provisioning. These were related to one-off events, including the transfer of production from New Zealand to Singapore.

Sales volumes in early 2009 were lower than expected and the company undertook a comprehensive review of expenses.

The company projects revenue of $10.5m in the six months to June 30, up 60 per cent on last year, but down from the $15.5m projected in a prospectus in January.

The company said in March it raised $10.75m. A rights issue raised $9.1m of the $11.4m sought and a placement to a major institutional lifted the total amount to $10.75m.

The company said then that it was talking to a potential investor about buying 6.5m shares.

- NZPA