Wellington Drive Technologies reported first-quarter revenue growth of 33 percent but maintained its annual guidance, stating the outlook for the second half is unclear and potentially weaker.
The company, which began as a developer of energy-efficient motors and has since expanded into areas as diverse as the internet of things and retail food and beverage, said revenue in the three months to March 31 was $15.8 million versus $11.9 million in the same period a year earlier.
Earnings before interest and tax were $500,000 compared to a loss of $400,000 in the prior year. The improvement was due to increased sales of higher margin products, the company said.
“The pressure from additional costs experienced last year caused by global supply constraints for electronic components abated in the current quarter.”
“We are pleased with our first quarter performance, which continues to demonstrate the growing demand for the Wellington Connect IoT and ECR2 products,” said chief executive Greg Allen.
“Some of the IoT customers we won in 2018 are starting to purchase product, while growth in ECR2 motors was offset slightly by declines in the non-ECR2 motors. This was mainly due to decisions we made to not compete at the lower end of the motor price point,” he added,
While he expects the first half to be stronger than 2018 in both revenue and margin, he said the second half is “still unclear and potentially weaker – hence we are maintaining previous guidance”.
Wellington Drive expects total revenue in 2019 to be flat to slightly up when compared to 2018, when it was $58.8 million. Earnings before interest, tax, depreciation and amortisation, net profit and operating cashflow are expected to be higher in 2019 when compared to 2018.
In the 2018 year, it reported ebitda of $2.5 million and a positive operating cash flow of $1.8 million. The annual net loss was $700,000.
The stock last traded at 23.5 cents and has lifted 57 percent during the past 12 months.