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2011 Half Year Result, Board Appointments and Share Repurchase

20 October 2011



Sealegs Corporation Limited (NZX:SLG) has today announced that sales for the half year ending 30th September 2011 were $6.889m, up 72% on the same period last year of $4.002m.  The loss for the period was $1.175m, compared to a loss of $0.941m in the same period last year.

At the end of the financial period the Company had cash and bank balances of $3.744 million, which allows the company to continue to invest in its development as highlighted below.

The Sales result is a pleasing increase in boats sold during the period. As at 30 September 2011, the company had invoiced 49 boats in the period, compared to 29 in the comparable half year period ending 30 September 2010 and to 76 boats in the full financial year ending 31 March 2011.

As a primary step to place the Company on a sounder financial footing, the Company took a decision to take greater control of its sales and marketing activities and to focus its resources on a smaller number of target markets which the Directors believe can generate significant boat sales moving forward. In particular, the Company established its own sales and service presence in the US with a facility in Boston. Given the pleasing preliminary results of this investment, the Company continues to assess possible additional owned facilities in further locations. In addition to this expansion in the US, the Company undertook a review of its European operations and expects to complete the disposal of this business in the second half of the financial year to a partner who is better placed to develop that market on behalf of the Company.

Additionally, a restructuring programme was undertaken in September 2011 which reduced the Company’s permanent workforce and, on an annualised basis, reduced costs by approximately $800,000.  The benefits of this initiative will be reflected in the second half of the financial year but the Directors believe this focus on an appropriately sized cost base will stand the Company in good stead moving forward.  

In addition to the operational improvements of the last 6 months, the Company has made a number of Board changes to further strengthen the business and position it for growth.

Most importantly David Glen has agreed to join the Company as CEO and a Director. David was previously with Southern Spars, another world leading New Zealand marine business, where he guided the growth and development of Southern Spars in New Zealand, Cape Town, Sri Lanka, USA and Denmark after its 2006 merger with Marten Spars. His experience in both product development and market development of premium marine products with short run manufacturing operations will bring valuable skills and experience to Sealegs. 

The Company is also pleased to announce the appointment of Chris Weir and Mike Beagley as Independent Non Executive Directors, replacing Chris Dickson and James Hill who have both stepped down from the Board. Chris has an extensive financial and private equity background gained over more than 30 years, primarily in Asia and the Middle East, whilst Mike is the majority owner and CEO of Rodd & Gunn, the New Zealand based retailer. The Board believes that both Chris and Mike will bring a range of business acumen and experience to the Company to complement its existing strengths and skills.

Eric Series and Mark Broadley continue as Board Members, while both Maurice Bryham and David McKee Wright have left the Board, but continue as employees of the Company focused on product development and sales respectively.

The Board has also determined that it wishes to have the flexibility to manage its capital base through the possible on market re-purchase of its shares should it feel a suitable opportunity might arise. Accordingly, the Company shortly will convene a special meeting of shareholders to consider this proposal.