Blis Technologies expects to report its first annual profit in 2017, the first for the biotech company since listing 15 years ago after sales more than doubled in 2016.
The Dunedin-based company reported a net loss of $816,000, or 0.07 cents per share, in the 12 months ended March 31, from a loss of $1.4 million, or 0.12 cents, a year earlier, it said in a statement. Revenue more than doubled to $5.6 million, and Blis expects that will rise to $8 million in the 2017 financial year which will underpin its first surplus, having accumulated losses of $33.3 million.
"There was a significant planned increase in overheads for the year, some of which we would not expect to recur and most of that added cost involved structural changes that will translate to benefit in coming years," chief executive Brian Watson said. "We expect to report a net surplus for the year to 31 March 2017."
Blis was set up to commercialise probiotic bacteria for use in consumer products for oral health, colds and flu and is focused on managing growth and continuing its strategy of securing regulatory approvals market by market. It first listed in 2001 but has yet to turn a profit.
Watson took over as chief executive in February, replacing the long-serving Barry Richardson. Blis didn't disclose the CEO's salary, but the top paid staff member received between $320,000 and $330,000 in the 2016 year, up from $270,000 to $280,000 a year earlier.
Blis's operational cash outflow almost halved to $511,000 in 2016, and the firm held cash and equivalents of $1.2 million as at March 31.
The board signed off on the financial statements being prepared on a going concern basis, saying the cash reserves were enough to meet budgeted capital spending and working capital needs.
"While the directors believe that there is no material uncertainty in respect of the group ability to continue as a going concern for the period assessed above, due to the level of its current cash holdings, there remains uncertainty as to whether the group can deliver the cash flow required to operate as a going concern, following the utilisation of current and any future available cash resources," the company said in its financial statements. "In the event it fails to achieve future profitability as planned the group may not be able to continue as a going concern."
Auditor Deloitte didn't mention the going concern notes in its report on the statements, saying they "present fairly, in all material respects, the financial position of Blis Technologies Limited and its subsidiaries as at 31 March, 2016." Deloitte received $35,000 for its audit of the statements, up from $33,000 a year earlier.
The shares dropped 8.8 per cent, or 0.3 cents, to 3.1 cents, valuing the company at $34.1 million.