Wellington Drive maintains revenue growth in Q1 2022

GENERAL
Thu, Apr 21 2022 09:57 am

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, is pleased to provide its trading results for the three months ended 31 March 2022 (Q1-2022).

• Revenue was $18.4m compared to $14.6m for the same period in 2021 (Q1-2021), a 25.8% increase.
• Gross Margin was 25.3% (28.6% in Q1-2021).
• EBITDA was $0.3m ($1.0m in Q1-2021).
• Cash at 31 March 2022 was $3.8m and the Company also had $2.4m available under its trade finance facility.

Since Q4-2021, the Company has been managing through very challenging supply issues, including electronic component shortages, increased input costs, constraints on shipping and increased shipping costs.

Component suppliers were unable to supply the quantities required by Wellington to meet its customer demand, despite confirmed orders in place within lead-times. While the Company purchased components on the spot market at a significant premium and had redirected its Auckland based engineering team away from new product development activities to focus on validating alternate components to be used in our existing products, we were unable to supply all customer orders.

EBITDA for Q1-2022 was also impacted by significant component cost increases, premiums paid for spot market purchases amounting to $0.4m and a lower level of capitalised development time of $0.3m ($0.7m in Q1-2021).

To address product cost increases, Wellington has already adjusted customer pricing and further pricing changes are under consideration.

We believe we have resolved the component supply situation for our Connect SCS product range and are now in the final stages of testing and certifying alternate components for our ECR2 motor range. Unfortunately, production will continue to be impacted in Q2-2022 as new components will not become available until H2-2022 and existing component supply means production is likely to be well short of what we require to meet customer demand.

Accordingly, we are adjusting our full year 2022 guidance. We expect US$ invoiced revenue in the range of US$55m to US$60m (previous guidance was around US$60m) which represents YOY growth of 17% at the bottom of that range. EBITDA earnings are expected to be in the range NZ$3.5m to NZ$4.5m (previous guidance in the range of NZ$4.5m to NZ$5.5m) which is still significantly above that recorded in FY2021.

The Company’s revenue would likely have been higher than that forecast but for the operating constraints outlined above.

CEO Greg Balla commented “Demand continues to be strong from existing customers for new build refrigeration units and is also increasing in the much larger retrofit market with one major customer committing to retrofit their entire fleet and several others are progressing well down the path. Our new products Connect Monitor and Connect Network Pro are also giving us access into new geographies and we are going through product validation with some of the largest Brands in Europe and the USA. I would like to thank our team for the immense effort they have put in to support our customers through the major global supply chain disruptions in Q1-2022”.

Announcement PDF

Markets News

Markets FREE
Eroad shares on the road to recovery
Ella Somers | Thu, 07 Jul 2022

Jarden wealth management director Greg Main said Eroad was continuing its “recent recovery” and rising strongly after being heavily sold down.

Markets FREE
AFT Pharmaceuticals launches new range of online medicines in China
Ella Somers | Thu, 07 Jul 2022

The Chinese market for over-the-counter medicines is the world’s second-largest behind the US and was growing rapidly, the AFT Pharmaceuticals managing director said.

Markets FREE
Pushpay wins over Seattle archdiocese as new customer
Ella Somers | Thu, 07 Jul 2022

The church management software firm hasn't been distracted by the takeover talk. 

Markets FREE
NZ dollar hits two-year low
Staff reporters | Wed, 06 Jul 2022

The New Zealand dollar fell to 61.59 US cents at 5pm this evening – the lowest it has been since May 2020.

Climate change
Carbonz resumes trading with creators standing by their credibility
Ian Llewellyn | Wed, 06 Jul 2022

The creators of a voluntary carbon credit and platform to trade them stand by their product.

Markets
NZX bond trading hits record in June
Dan Brunskill | Wed, 06 Jul 2022

Investors sought refuge from volatile equity markets by buying bonds and ETFs in June.

Primary Sector
Synlait hikes milk price forecast as kiwi hits two-year low
Rebecca Howard | Wed, 06 Jul 2022

Synlait's new forecast brings it in line with Fonterra.

Markets
Supie faces fight for online grocery market share
Dan Brunskill | Wed, 06 Jul 2022

Unlike many start-ups, Supie has big competitors already expanding their services to defend against disruption. 

Markets
Vista facing short-term capacity bottlenecks on cloud rollout
Jenny Ruth | Wed, 06 Jul 2022

Longer-term, the cloud strategy is expected to lift per-site revenue by more than 2.5 times and fatten margins by about 40%.

Markets FREE
RBA hikes rates by 50 basis points
Ella Somers | Tue, 05 Jul 2022

The RBA’s hike was widely expected to be either in the 25bp or 50bp camp so the decision to go with a 50bp jump didn’t come as a huge surprise.

Markets FREE
NZ shares start second half of the year more positively
Ella Somers | Mon, 04 Jul 2022

“The kiwi dollar is always going to be like a cork on the waves of global sentiment,” independent treasury adviser Peter Cavanaugh said.

Markets
SkyCity facing another probe at Aussie casino
Brent Melville | Mon, 04 Jul 2022

The fallout from Australian money laundering investigations into casino operators Crown and Star Entertainment has put SkyCity's Adelaide property in the regulatory cross-hairs.

Opinion
Walnuts, sledgehammers and sloppy paperwork
Jenny Ruth | Mon, 04 Jul 2022

Foreign fund managers are often careless about filing substantial shareholder notices but the available remedies have never been used. 

Finance FREE
Money Answers: what's the best share investing strategy in a recession?
Frances Cook | Sat, 02 Jul 2022

Spreading your money through good quality companies, then leaving it alone for a few years is the boring but most likely way to build wealth for most of us. 

Markets market close
NZ stock market finishes first half of 2022 down 18%
Dan Brunskill | Fri, 01 Jul 2022

One analyst said market participants will be glad to see the back of the turbulent second quarter.

Property
Jasper opens secondary market, sets sights on Aussie
Brent Melville | Fri, 01 Jul 2022

Young property guns Jasper are taking their 'sharesies' style property investment model into a more marketable terrain.

Markets
NZ stocks lose $55 billion of value in six months
Dan Brunskill | Fri, 01 Jul 2022

Interest rates have skyrocketed in 2022 and sent share prices plunging. 

Markets FREE
Eroad shares fall to all-time low
Ella Somers | Thu, 30 Jun 2022

Fleet management company Eroad dropped 3.4% to $1.42 today – its lowest share price since 2016.

Climate change
Carbonz to resume trading after credibility questioned
Ian Llewellyn | Thu, 30 Jun 2022

After a troubled start, a new carbon trading platform says it will resume operations next week.

News in Brief
NZ King Salmon shuts down sale rumours
Staff reporters | Thu, 30 Jun 2022

The salmon farmer scotched rumours in Australian media it's up for sale.

Markets
BusinessDesk owner NZME hits 100,000 digital subscriptions
Oliver Lewis | Thu, 30 Jun 2022

The owner of BusinessDesk has hit a new high, with even more customers choosing to subscribe.

Energy
High power prices in NZ – what's the 'new normal'?
Ian Llewellyn | Thu, 30 Jun 2022

Indonesian coal prices are now one of the main drivers of wholesale electricity prices in NZ.

Markets market close
NZ shares fall as market rally evaporates
Dan Brunskill | Wed, 29 Jun 2022

A survey showed US consumer confidence was at its lowest since 2013.

Infrastructure
Kiwi chair Mark Ford says property values may fall 5-10%
Jenny Ruth | Wed, 29 Jun 2022

Many of the factors weighing on Kiwi Property's share price are beyond its control, chair Mark Ford told shareholders.