Sea change
Sealegs (SLG.NZ) reported better than expected H1 results, driven by tighter cost management and increased sales from the higher-margin amphibious enablement systems (AES) and B2B sales to hull manufacturers. Since reappointing founder David McKee Wright as CEO in November 2014, the Auckland-based company has focused on developing a licensing strategy for its amphibious enablement systems, which we see as a significant game-changer for Sealegs. The company has recently passed a number of milestones including producing its 1,000th amphibious boat, the launch of its nine-metre Interceptor and the IKA11 aimed at the international military market.
H1 update
Sealegs reported H1 net profit after tax of NZ$0.37m, up from NZ$0.03m year-on-year. Revenues were 3.5% lower at NZ$9.3m due to the shift in product mix to higher-margin OEM and amphibious enablement systems. As a consequence, the company’s gross margin increased 588bp to 28.9% in the six months to 30 September. Sealegs reported gross profit of NZ$2.7m vs NZ$2.2m y-o-y. The results also demonstrated good cost containment. Costs increased just 2.6% for the half year, with distribution declining 16% and marketing expenses falling 11% against a 13% increase in administrative costs.
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