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Wellington Drive shares jump after profit

NZN 31/01/2017 Sophie Boot

Shares in Wellington Drive Technologies, which makes energy efficient motors for commercial refrigerators, have jumped after it posted its first profit after lifting revenue 44 per cent in 2016.

Revenue rose to $35.3 million in the year to the end of December from $24.6 million a year earlier, the company said.

Its target of a "modest ebitda profit" was achieved and gross annual margin rose to 24.4 per cent.

Wellington Drive uses earnings before interest, tax, depreciation and amortisation because it believes the measure avoids distortions.

"We are seeing initial strong demand forecasts from customers for Q1 2017 although we are still working with customers to determine and confirm volumes for the first half of the year," the company said.

"Our early forecast for 2017 indicates that the company can achieve further revenue growth and we continue to expect an ebitda profit for 2017 in the low millions."

The shares jumped 10.2 per cent to 19.5 cents, and have more than doubled in value within the past year.

It received $10m of revenue in the fourth quarter compared to $6m in the final quarter of 2015.. Full results will be released in February, it said.

Wellington Drive has focused on Latin America to make the company profitable after years of underperformance, convincing cornerstone shareholder SuperLive, the NZX-owned fund manager, to back a series of capital raisings.

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