30 Aug 2012

Sales boost loss-making motor maker

9:05 am on 30 August 2012

Wellington Drive Technologies has almost halved its losses due to stronger sales in the United States and Latin America.

The energy-efficient motor maker lost $3.3 million in the six months to June, compared with a $7 million loss for the same period last year.

Stripping out one-off items related to restructuring costs, the loss narrowed further to $2.4 million.

The company says revenue rose nearly a quarter to $22 million, with 26% of that coming from the US and strong demand from Latin America.

Wellington Drive was established 25 years ago, but is yet to make a profit. Last year it undertook a one-for-20 share consolidation and appointed a new chief executive.

Its stock price has fallen 98% since the end of 2007 and is currently trading at 14 cents a share.

Strategic partnerships way forward

The company aims to make strategic partnerships in its global markets to help grow its business long-term.

Chief executive Greg Allen says the company has consolidated some of its US partnerships into distribution channels, which has boosted its revenue from that market.

While its largest market, Latin America, which accounts for about 40% of its product, showed strong demand in the first half, it has started to soften.

Mr Allen says weak demand in Europe is having an impact and the company is reducing its revenue guidance for the second half.

He says the company has what it calls five turnaround initiatives underway including on cost reduction and improving business processes, which it is hoped will mitigate the challenges.