Hansells Food Group's auditor has again cited material uncertainty related to the food ingredients company's ability to continue as a going concern after it posted a drop in sales and a narrower full-year loss.
The owner of brands including Hansells cooking ingredients, Thriftee drink concentrate, WeightWatchers foods,Alfa One rice bran oil, Vitafresh and Vitasport drinks, recorded a loss of $6.8 million in the year ended March 31, from a loss of $9.4m a year earlier. Revenue fell 15 per cent to $103.7m, according to the Auckland-based company's annual report. Cost of sales fell 12 per cent to $79.7m.
Auditor BDO Auckland cited the loss in its audit of the accounts while noting that current liabilities exceeded current assets by $34m and negative net assets had widened to $7.4m from $1.6m in 2016.
Notes to the company's accounts say it has received continued support letters from controlling shareholder Varapong Supachok, with a 65.9 per cent holding, and from Thailand's Kasisuri Co, which owns about 5 per cent and is associated with Varapong Supachok. Hansells has negative working capital of $34m from $31m in 2016. Included in that negative working capital balance are trade payables and interest bearing loans owed to Kasisuri of about $42m, up from $36m a year earlier.
Supachok, who is based in Thailand, is chair of Hansells and is also a shareholder and chief operating officer of Kasisuri. The notes reiterate the company's view in its 2016 accounts, saying the going concern assumption assumes no significant changes in either the New Zealand or UK operations, the attainment of expected cost savings from restructuring in Australia and continued funding from Scottish Pacific, Kasisuri and Supachok.
Hansells had $14.5m of loans from Scottish Pacific and related parties at balance date, down from $18m a year earlier. The loans mature in 2017. In the latest year finance costs fell to $3.8m from $5m.
Other costs also fell. Freight and distribution expenses declined to $5.7m from $8.6m while sales and marketing costs slipped to $19.9m from $20.8m. Administration expenses dropped to $1.5m from $5.8m.
