Investors see brighter prospects for Kiwi lightbulb maker after deal with Amazon.
Shares in lightbulb maker Energy Mad surged after it announced it had begun selling its energy-efficient products online in the United States through internet retail giant Amazon.
The Christchurch-based company, which has continually failed to deliver on the profit forecasts published in its 2011 initial public offer prospectus, says four of its products are being sold on Amazon under Energy Mad's US Ecospiral brand.
The Kiwi firm, whose light bulbs are manufactured in China, says it intends to increase its product range on Amazon "with time".
Shares rallied more than 80 per cent after news of the online retail deal, before closing up 26c, or 76.47 per cent, at 60c.
Managing director Chris Mardon said Energy Mad was talking to US electricity providers to try to secure funding to allow the company to lower the price of its products sold on Amazon, which would help to drive sales growth.
"The reception so far is encouraging," Mardon said.
Energy Mad has already had more than US$1.5 million ($1.8 million) in funding from 28 US electricity suppliers, which has allowed the firm to sell its bulbs through American pharmacy chain Walgreens at a highly discounted rate.
The funding allows a pack of three 15-watt bulbs, normally sold for US$10.99, to retail for just US$3.99.
The company said this week that demand for its products was increasing at Walgreens, which has more than 8000 stores across the US and posted revenue of more than US$72 billion in 2012.
Energy Mad said its sales at Walgreens had doubled over the past few months, resulting in a resupply order from the drug-store operator worth US$46,000.
"While this reorder is relatively small, it is pleasing that growth in sales has reduced Walgreens stock levels sufficiently that they are now reordering," said Mardon.
New Zealand Trade and Enterprise, the Government's export development agency, is funding 50 per cent of the firm's retail display costs at Walgreens.
Energy Mad chief executive Paul Ravlich said the resupply orders from the pharmacy chain should be "enhanced" if the company begins direct mail marketing projects with a number of US electricity providers.
"Replicating the results of the Walgreens Rhode Island Massachusetts store, where the two-week pilot with utility National Grid grew sales 480-fold, with other utilities should drive larger restocking orders with Walgreens," Ravlich said.
Energy Mad shares have been well below its 2011 listing price of $1 on the back of poor financial results.
And it was last year censured and fined by the NZX for not providing material information to the market on December 20, 2011, soon after its IPO.
It reported a $2.5 million loss for its last financial year, compared with the $4 million profit it forecast.