v2 Report - Additional Information Supplement

NEW New Image Group Limited

 

 

IPOs and Investment Opportunities

Press releases

New Image Group Announcement

New Image announced on 22 May 2007 that it had decided to stop funding the unsustainable administrative costs of Omegatrend International Pty Limited (OTI). Official liquidators have now been appointed in respect of OTI. The Direct Selling operations had been included in New Image operations to secure the ongoing and future business opportunities for the OTI members who are unaffected by this liquidation.

The financial and operational position for New Image is unchanged from that reported on 22 May 2007. The New Image Group has reported monthly profits since these decisions were made. The decisive strategy adopted by the Board regarding OTI effectively removed future uncertainties and places the New Image Group in a strong position going forward. Group turnover for the last quarter of $7.5 million is equivalent to 69% of the total annual turnover for 2006. This has been achieved despite the adverse effects of the high New Zealand dollar exchange rate.

I remain confident that our strategies to invest in long-term concepts in the direct selling and brand distribution will pay substantial dividends.


GL Clegg
Chairman

Chairman's report

 

Preliminary extract from the Chairman's annual report.
30st August 2007
The New Image Group is a leading manufacturer and marketer of superior nutritional supplements with a very strong direct sales presence in seven Asia / Pacific countries. Omegatrend International that was acquired in August last year was an Australian based direct selling company with a substantial direct sales networks also in Malaysia New Zealand and Singapore. The past 12 months has been difficult with the acquisition of Omegatrend stretching resources and capital. Previous reports to the NZX have adequately covered the situation and the reasons the board took decisive action to address the matter. Unacceptable loss's were stemmed and since May all sales and trading activities have been incorporated into the New Image structure. Considerable resources have been directed into consolidating the distributor base which is responding favourably to the evolving business model. The combined company's direct sales base in New Zealand Australia, Malaysia and Singapore is considerably strengthened and now has reduced overheads. A stronger contribution to the bottom line is expected from these companies and is a positive asset from the acquisition.
The Omegatrend group of companies recorded a 9 month trading loss $2.81 million after minorities.

A further extraordinary write off of $3.29 million was taken off the Omegatrend Investment resulting in at total loss of $6.1 million. This action completely clears out any negative legacies from this division.

The consolidated group recorded a profit of $192,000 for last quarter of the financial year indicating the restructuring had impacted positively and this is expected to grow strongly.
The New Image Group (Without Omegatrend Operations) had a good year trading profitably reversing the $730,000 loss of the previous year.

The New Image Group experienced very substantial growth for the year recording sales of $25.6 million. July and August sales were $9 million giving an excellent start to the new financial year.
The following sales show the growth from 2005.

2005: $10.5 million
2006: $10.8 million
2007: $25.6 million
2008: $40.0 million projected

Indications are for strong growth to continue, particularly in Asian markets, which augers well for good profitability for the 2007/8 financial year.
Approximately 90% of sales are export related.
In order to fund the additional working capital requirements associated with the current strong sales growth the board is currently considering an additional placement of new shares.
The annual general meeting will be held in October.

Graeme Clegg.
Chairman

Director's Report

 

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