Charlies Group, the juice company fronted by former All Black Marc Ellis, was today talking up its new Australian plant, the setting up of which contributed to its annual loss.
The loss of $425,000 in the year to June 30 reported by the company today compared to a $33,000 profit in the same period last year and was achieved on a 24 percent increase in revenue. No dividend was declared.
The company incurred one-off costs to set up the production facility in Renmark, South Australia, including a loss of revenue and profit from industrial action at contract packers losing work to the new facility.
"The benefits of this investment were immediately realised with a positive swing in profitability in the last quarter of the financial year when commercial production commenced," the company said.
Chairman Ted van Arkel said t he establishment of the Australian facility was a highlight of the year.
"We purchased the assets of the Gallard and Mirage Group in October 2007 and turned these into a fully operational, state of the art plant within six months," he said.
A substantial investment in raw material inventory also increased the group's working capital requirements.
The company had negative cashflow from operating activities for the year ended June 30, which it did not detail in its statement to the NZX.
Inventory holdings increased from $2.6m at June 30 last year to $5.3m.
"We now have an appropriate raw material base for all Charlies products and as we run down the stock holding of products produced by our contract packer, we expect our operating cashflow to normalise," the company said.
Charlie's made a back door listing on the stock exchange in 2005 via reverse takeover by Spectrum Resources. It then bought Phoenix Organics. Its shares last traded at 13c.