Wellington Drive Technologies (Wellington and the Company), a leading provider of Internet of Things (IoT) solutions and energy efficient motors to the retail food and beverage industry, today released its unaudited financial statements for the six months ended 30 June 2020. The Company’s Interim Report, with management discussion and analysis, can be found on the NZX website, under the Ticker NZX:WDT at https://www.nzx.com/instruments/wdt.
Revenue for the six months ended 30 June 2020 was $20.5m, a 38.5% decrease over the same period last year. The result includes a $1.1m operating expense reduction versus the same period last year as result of cost reduction measures implemented to mitigate the impact of COVID-19 on the business. The Company expanded its gross margin percentage and achieved an EBITDA1 surplus of $1.14m compared to $2.45m last year and a net loss of $0.79m, down $1.51m on the same period.
|Metric $||H1 2020||H1 2019||Change|
|Wellington Connect™ IoT revenue||$8.0m||$13.5m||-40.6%|
|ECR® 2 motor revenue||$7.6m||$11.2m||-32.0%|
|ECR legacy motor revenue||$4.2m||$7.6m||-45.3%|
|Gross margin %||30.3%||25.8%||+4.5%|
|Operating expenses net of other income||$5.1m||$6.1m||-17.2%|
|Operating cash flows||$0.72m||$1.11m||-34.8%|
Results for the first half reflect COVID-19 related supply chain constraints in the first quarter and the weakening of customer demand in the second quarter due to customer factory closures, food and beverage brand equipment spend reductions and government mandated regional restrictions. The Company acted quickly to mitigate those impacts, with a range of cost reduction and cash initiatives that included board and management compensation reductions, companywide salary reductions, capital spend deferrals, renegotiated supplier terms and a successful pro-rata rights issue.
The initiatives were implemented with a parallel objective to maintain Wellington’s core operational capabilities and new product pipeline options, so the Company is ready to resume the positive performance trend seen in recent years once customers start to come back online.
CEO Greg Allen commented; “We are managing through an unprecedented disruption in demand, directly as a result of the global COVID-19 pandemic. Throughout this period our team has focused on the health and safety of all and the Company’s stakeholders, reduced costs to mitigate financial impact and continued to support new product and customer activity to ensure we come back as strong as ever when the market normalizes. The recent introduction of our new Connect Monitor retrofit device for commercial cooler and ambient applications, that provides connectivity and data solutions for installed equipment, is an example of how the Company is maintaining core capability and continues to innovate despite the uncertainty created by the pandemic.”