BLIS Technologies Improves second half-year performance

BLIS Technologies Improves second half-year performance

Dunedin based biotechnology company, BLIS Technologies Ltd (NZX: BLT) recently reported to its shareholders the results for its financial year, ending 31st March 2012.

Whilst the Company (parent) recorded a net deficit of $1,733k (2011: $1,385k), the Group recorded a net deficit of $1,759k. The Group's trading revenue however, increased from $1,351k (2011) to $1,467k.

Despite poor sales in the first six months of the year, BLIS Technologies was able to finish the year strongly. While not able to surpass the full year US market ingredient sales of 2011, the company was able to reduce losses incurred in the first half of the year through the appointment of a new distributor and a refocused sales and marketing effort in North America. The Company, in association with its distribution partner, Pharmabroker Sales (NZ) Ltd increased New Zealand retail sales by 23% over prior year. This was on top of 13% annual growth for the 2011 year. The Company doubled sales in Asia and showed a very slight increase in sales for Australia. In addition, the company is pleased with early successes from internet sales (www.blis.co.nz ), posting a small, but not significant revenue after nine months of operation.

"Unlike pervious years, where the company received significant revenue through contract research or grant funding, revenues in 2012 were almost entirely from our own commercial efforts, said Dr Barry Richardson, Chief Executive Officer. "A highlight for the year was that we managed to quickly put a remedial plan in place for the North American market and refocus our efforts on our existing customer base, which has proven good for the company. However, we still have a lot of work to maintain forward momentum and to build on the work being done in the North American market."

Dr Richardson indicated that much of the problem in North America came from a rapid down turn in sales from a single key retail brand manufacturer.

"The US consumer mass market is driven by advertising and promotional spending and support from the brand manufacturer and so in this case, when the retail brand manufacturer suffered a company-wide downturn in sales, it also hit the BLIS probiotics products that they had been marketing. Unable to sustain their promotional activity, the majority of retailers removed them from the shelves and within a few short months they had gone from national retail distribution to limited distribution." Richardson said.

The Company also notes the contribution to sales that its acquisition, The Gourmet Ice Cream Company, has made during the past 12 months. This result, taken in combination with the steady growth of the New Zealand pharmacy market, is the highest revenue earnings that the company has achieved within the New Zealand market, since it started operations.

During the past financial year the company has cleared several regulatory hurdles in different markets and is now preparing to undertake commercial development programmes. These markets include China, Russia and the food ingredient industry within the United States.

"The decision to obtain the US FDA's GRAS status for BLIS K12 has proven to be very useful in assisting the company with regulatory approval in other markets", said Dr Richardson. "because this process requires an international board of independent experts to attest to the fact that BLIS K12 is safe for inclusion into food for its intended purpose, then this not only opens up future opportunities in within the food industry but perhaps more importantly it helps enormously other regulatory agencies around the world.

The Company also announced that the 4,000,000 Convertible Preference Shares, which it had on issue, were automatically converted to Ordinary Shares to those holders of Convertible Preference Shares and pursuant to their terms of issue, at a ratio of 74.52 Ordinary Shares per Convertible Preference Share held. As a result that Company advised that a total of 298,062,787 Ordinary Shares were issued, pursuant to the conversion of the Convertible Preference Shares.

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