peterau
Peter
SOUTH Australian electronics manufacturer Codan has flagged the sale of its Newton and Torrensville properties following a 79 per cent drop in profit.
The company reported a profit of $9.2 million, down from the previous years record $45.5 million performance.
Revenues fell to $132.3 million to the end of June from $244.3 million previously.
A proposed $10 million expansion of the Newton site has been put on hold with the company looking at an option to lease premises elsewhere in the state and sell off the two sites.
With carrying values totalling $10 million, the proceeds from the sales would help the company strengthen its balance sheet.
Codan saw unprecedented demand for its gold detector products in the African market in FY13 and significant sales into the region in the four years to 2013.
Unfortunately, counterfeiters were attracted to the same opportunity and when demand slowed in the absence of gold rushes, there was excess supply in the market, Codan told shareholders.
The lower lever of gold detector sales into Africa was the primary reason for the decline in the companys profitability in FY14.
The company, which employs up to 400 staff (about 100 overseas) implemented some cost savings in the first half, including cutting 40 Adelaide jobs from its workforce.
No guidance was provided for the current year but the radio communications business gaining momentum.
New product releases are also planned for the Minelab product range.
While the decline in FY14 sales has been dramatic, the Minelab business remains our most profitable segment.
A 1.5c per share fully franked dividend will be paid on October 1.
The company reported a profit of $9.2 million, down from the previous years record $45.5 million performance.
Revenues fell to $132.3 million to the end of June from $244.3 million previously.
A proposed $10 million expansion of the Newton site has been put on hold with the company looking at an option to lease premises elsewhere in the state and sell off the two sites.
With carrying values totalling $10 million, the proceeds from the sales would help the company strengthen its balance sheet.
Codan saw unprecedented demand for its gold detector products in the African market in FY13 and significant sales into the region in the four years to 2013.
Unfortunately, counterfeiters were attracted to the same opportunity and when demand slowed in the absence of gold rushes, there was excess supply in the market, Codan told shareholders.
The lower lever of gold detector sales into Africa was the primary reason for the decline in the companys profitability in FY14.
The company, which employs up to 400 staff (about 100 overseas) implemented some cost savings in the first half, including cutting 40 Adelaide jobs from its workforce.
No guidance was provided for the current year but the radio communications business gaining momentum.
New product releases are also planned for the Minelab product range.
While the decline in FY14 sales has been dramatic, the Minelab business remains our most profitable segment.
A 1.5c per share fully franked dividend will be paid on October 1.
