Advance ZincTek (ANO) H2 2024 earnings summary

Executive summary

• Reported a net loss after tax of $903,000 for FY24, primarily due to the loss of a major customer in North America and strategic decisions including the closure of the Perth facility.

• Sales revenue declined significantly in North America (down 62.2%), but increased in Europe (up 12.7%) and Asia (up 5.7%).

• The company diversified its customer base in the USA, moving from a single distributor to four, with further expansion planned.

• Closure of the Perth facility is expected to yield substantial cost savings in FY25, with a 25% reduction in total operating costs already observed in July/August 2024 compared to the prior year.

Financial highlights

• FY24 revenue was $9.32 million, down from $13.75 million in FY23.

• Net loss after tax was $903,000, compared to a profit of $1.66 million in FY23.

• Gross margin impacted by lower sales and one-off costs related to facility closure.

• Cash and cash equivalents at year-end were $163,000, down from $325,000 in FY23.

• Inventories reduced by $3.57 million, improving working capital.

Outlook and guidance

• Expectation to match FY24 USA sales within the first four months of FY25, with new customers onboarded.

• Further reductions in finished goods inventory anticipated in FY25.

• Regulatory changes in Australia (TGA inspections) may impact competitors, potentially benefiting the company.