Lower margins hit Funtastic
The distributor of brands including Chupa Chups, Warheads and Cabbage Patch Kids, said weaker than expected international sales and excess stock contributed to the loss, which was worse than the previous year’s $25.9 million half year deficit.
Lower margins in its Australian business due to a weaker currency, and the costs of rationalising its operations were also to blame, Funtastic said.
But inventory levels have now normalised and margins have stabilised, it said.
The continued expansion of its Chill Factor range of slushy, ice cream and jelly makers, and cost saving initiatives, are expected to deliver benefits in the second half of the fiscal year.
Funtastic has also secured a number of new products, including a Chill Factor drink bottle and self sealing water balloons, that it expects will increase sales when launched in Australia and in key overseas markets.
The company’s shares dropped 0.2 cents, or nine per cent, to 2.1 cents.
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