Sealegs says slowdown means it needs more capital

David McKee-Wright. Photo/ Glenn Jeffrey

Amphibious boat maker Sealegs is feeling the effects of the deteriorating global economy and will need to raise more capital.

The company said it has experienced a sudden and significant reduction in the rate of new orders.

It expects demand for luxury goods like its boats to be weaker because of the global economic situation and is responding by expanding its marketing network.

The company is now forecasting a loss for the full year within 5 per cent of break even and revenue between $11 million and $15m.

"Although some operating costs have already been reduced, further cost reductions are required," said chief executive David McKee Wright.

"The current fixed overheads and stock levels mean that further capital will be required to fund cashflow requirements."

Sealegs is exhibiting at boat shows in the United States in the next two months.

Sales in the six months to September 30 rose 73 per cent to $7.8m.

In the half year period the company significantly increased production capacity and reduced delivery times for new orders. The company is currently making about 12 boats a month.

Sealegs UK distributor Amphibious (UK) Ltd has signed a contract to purchase $2m of product over the next 12 months.

In May the company reported a $1.7m annual loss, which it blamed on new accounting standards.

Cashflow from operating activities was minus $2.4m compared with minus $427,981 a year earlier.

Revenue from ordinary activities rose 92 per cent to $9.6m in the year.

- NZPA