Blis Technologies is back in the black, thanks to what the company says is a more focused approach.
The Dunedin-founded probiotics company yesterday posted a return to profitability after two years of operating losses.
The $600,000 net profit after tax for the year to March 31 was achieved on revenue of $11.5 million, 12.6% higher than the previous year.
Blis, which marks its 25th anniversary next year, posted its maiden profit in 2019.
In its announcement to the NZX, the company said revenue growth was achieved in its business-to-business (B2B) segment, with an 18.2% increase in ingredient sales and royalty income. Revenue in the business-to-consumer (B2C) area was affected by cost-of-living pressures on its customers and, as a result, revenue was consistent with the previous year.
The revenue growth, combined with a tight control over costs, resulted in an improved trading performance.
There was a $1.4m loss in the previous financial year.
The cash surplus from operations improved to $1.1m.
Blis continued to be in a strong financial position with cash and cash equivalents and short-term deposits of $8.5m, the company said.
In his report, chairman Geoff Plunket said the board and leadership team remained committed to the current strategy of focusing on delivering revenue growth from ingredient sales and royalty income in B2B markets as the pathway to delivering sustained profitability.
The three-year strategic plan for the business had been updated and that plan had a commercial focus structured around working closely with Blis’ key customers and exploring new opportunities in other markets where it could present a competitive offering.
That approach would see the company refocus its R&D work on ensuring Blis had appropriate regulatory approval in key markets and supporting the commercialising of its two key hero products K12 and M18.
Over time, the company would invest more in R&D but that required a sustainably profitable position, Mr Plunket said.
"Blis has many good ideas and in the past resources have been spread thinly over a number of projects.
"This more focused approach is intended to concentrate on achieving short-term commercial success.
"We will review our investment in R&D each year, to ensure that we have the right balance."
Blis would continue to look for new opportunities to license its skincare product as a B2B opportunity. In the short term, it had decided to limit further development to support the commercial success of its existing customer.
It was also pausing development of a probiotic toothpaste, as the market for the product was uncertain.
