Funtastic expects first half loss

coloured puzzleToys, sporting goods and confectionery distributor Funtastic expects a loss in earnings for the first half of its fiscal year, partly because of slower international sales.

Funtastic said on Tuesday that, according to its preliminary assessments, it expects revenues for the six months to January 31, 2015 of $50 million to $54 million and an EBITDA (earnings before interest, tax, depreciation and amortisation) of between $2.5 million to $4.5 million.

Funtastic said the estimates are not definitive.

“This expected loss is due to the deterioration in the company’s second quarter performance which has primarily been driven by softer than expected international sales, lower domestic margins and additional one off rationalisation costs,” Funtastic said in a statement.

Funtastic said it had taken steps to ensure a return to profitability in the second half of fiscal 2015.

The company had secured a number of new products that would increase sales when launched in Australia and in key overseas markets.

Funtastic would also expand its Chill Factor range of slushy, ice cream and jelly makers, and continue to benefit from earlier cost saving initiatives.

Shares in Funtastic fell sharply in the wake of the announcement and were 0.8 cents lower at 2.2 cents at 1234 AEDT.

Funtastic will report its half year results towards the end of March 2015.

Funtastic provided the earnings guidance in response to a query from the Australian Securities Exchange in relation to movement in its share price on January 23.

Funtastic said it was aware that an institutional shareholder had been required to reduce its shareholding and had been doing so since mid-December.

Funtastic believed that this was not based on any market sensitive information regarding the company.

AAP

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