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Trilogy shares slump on FY2017 guidance

NZ Newswire logoNZ Newswire 22/09/2016 Edwin Mitson

Shares of Trilogy International, which have almost tripled in the past 12 months, dropped to a three-month low after the skincare and home fragrance company raised its full-year sales guidance for a second time, suggesting investors were hoping for even better news at Thursday's annual meeting in Auckland.

The stock dropped 14 per cent to $4.01, and earlier sank as much as 18 per cent to $3.81, trimming their gain in the past 12 months to 47 per cent.

Daniel Metcalfe, senior investment advisor at OMF in Auckland was sceptical about the sell-off.

"I think it's a bit of profit-taking. The guidance they've given seems pretty bullish to me," he said.

"They're raising the bar yet again. But then again, they've had such fundamental growth over the last two years, perhaps investors expected more."

The company told shareholders at their annual meeting in Auckland that it expects 2017 revenue of $100 million to $110m, a gain of between 20 per cent and 32 per cent over 2016's $83m of sales.

Trilogy's brands include Ecoya candles, Trilogy and Goodness. It also owns CS & Co, the country's largest independent importer and distributor of fragrances and toiletries, which it bought in August 2015.

Earnings before interest, taxation, amortisation and depreciation are expected to be $19m to $21m, an increase of between 17 and 29 per cent. That compares with ebitda of $16.3m in the 2016 full year.

If Trilogy International achieves $100m in revenue it would have almost tripled sales in just two years, mainly through the CS & Co acquisition. CS & Co delivered $28.6m in revenue in the seven and a half months it contributed to Trilogy's FY2016.

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