Funtastic suffers half year loss


944233_94159959Toy distributor Funtastic has suffered a $26 million half year loss and says sales of some of its key brands have been disappointing.

The company’s loss in the six months to January 31 was largely caused by a writedown of $24.2 million on its entertainment division, Madman, which is in the process of being sold.

Funtastic also had higher costs in the period, while the weaker Australian dollar and poor sales of key brands including Leapfrog, Power Rangers and Ben 10 also impacted its performance.

The company made a $9.3 million profit in the same period a year earlier.

Funtastic will not pay out an interim dividend, but CEO Stewart Downs expects a better performance in the second half of its fiscal year.

“Given our strengthening financial position and operating performance I expect to resume dividend payments to shareholders when we announce our full year results,” he said.

An expected second half improvement would see the company achieve earnings of between $19 and $23 million for the full year, Mr Downs said.

It had earnings of $3 million in the six months to the end of January.

Two expressions of interest have been lodged for the Madman business, which distributes DVDs and Blu Ray products and manages rights for films and television programs.

Funtastic said it expects a sale will be completed by the end of July.

Aside from the reduced value of Madman, the business also had a fall in earnings due in part to changes to its distribution model.

“It was a disappointing first half domestically both for Funtastic Australia and Madman Entertainment businesses,” Mr Downs said.

But Downs said the company’s move into producing its own products was paying off, with strong sales growth from its Chill Factor slushy maker during the half.

“On a positive note, our own brands performed exceptionally well now making up 56 per cent of our earnings contribution,” he said.

Funtastic shares were up half a cent at 13.5 cents at 1130 AEDT.


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