Dunedin probiotic company Blis Technologies has identified some product in Europe as ''cosmetically unacceptable'' and is setting about replacing the blister-packed lozenges.
Blis yesterday stood by an earlier revision to its full-year revenue guidance, forecasting it to increase by more than 100% to more than $5.3million, but is now making a provision of up to $350,000 against the half year results, over additional costs of the European product replacement.
Blis requested its shares be placed on a trading halt before the market opened on Monday, so it could investigate a ''quality issue'' in a product overseas, and resumed trading yesterday. When halted, the shares were trading 2.6c, and on reopening yesterday lost more than 11%, to 2.3c.
Blis' chairman Peter Fennessy said in a market update yesterday ''speckled discolouration'' in a lozenge product for one European customer was discovered, with later tests showing ''extreme humidity'' may have been the cause.
''Investigations of retention samples held by the company in New Zealand show the product remains safe, although cosmetically unacceptable,'' Mr Fennessy said.
Improvements are under way in production, quality control and logistics, and in the short term some lozenges will be manufactured in Europe.
Listed in 2001, Blis was founded on a natural antibiotic to control streptococcal throat infections and went on the develop lozenges, sprays and additives for dairy products; its mainstay being its Blis K12 throat guard.
Craigs Investment Partners broker Peter McIntyre said Blis had made ''huge strides'' increasing revenue growth, and while the lozenge issue could ''affect credibility'', he expected Blis ''to be working overtime'' to rectify the issue.
