CANBERRA: Shares of Australian chocolate marker, Yowie Group Ltd (ASX: YOW) today climbed as much as 3% higher following a solid 2015 revenue result. In the year ended June 30, 2015, Yowie recorded 2,200% revenue growth and a 49% improvement on its 2014 net loss, coming in at $3.49 million.
Yowie is currently rolling out its chocolate confectionary across the enormous consumer market of the United States. Therefore, given its status as a small-cap Australian business, losses can be expected.
A big kicker for the investment case of Yowie is that it is somewhat shielded from intense competition until 2017 because it has exclusive access to the market for chocolates with encapsulated toy products.
To put the loss in perspective for those who don’t follow the company, last year Yowie didn’t make any meaningful revenue because it hadn’t yet secured the huge distribution agreements with Wal-Mart Stores Inc, Safeway Inc, Cost Plus, Valero and many more – which it has today.
Since September 2014, Yowie has secured an agreement from Walmart – the world’s largest retailer – to distribute its product to 4,300 stores (starting in August 2015), an improvement of 4,250. This year its cash receipts from customers came in at $2.57 million, and its revenue was $3.04 million.
Pleasingly, with revenues up around $3 million, it was good to see expenses climb only $3.2 million – indicating we could be at a key inflexion point toward profitability. Indeed, the group believes it’d require an investment of just $600,000 to take its production plant from 20 million units per annum to 40 million units.
