Advance NanoTek continues to drive profits despite ongoing delays in US move
Health & Biotech
Health & Biotech
Sunscreen maker Advance NanoTek has reassured shareholders it is trading in profit, despite manufacturing delays of more than six months.
NanoTek’s efforts to move production of its trademark Zinclear UV absorption product for sunscreen and cosmetics from Perth to the US was finalised in mid-January.
Full-scale US production was slated for May, but there have been several delays announced to market.
Today Nanotek told shareholders full-scale production would not start until early next year.
Shareholders reaction was muted. NanoTek (ASX:ANO) remained unchanged at 50c on Wednesday, giving it a market cap of $29 million.
The shares \have traded between 23 and 58c in the past 12 months.
Net profit before tax was $560,000 for the five months to November, following a maiden financial year in profit in FY2017, the company said.
Further delays were also slated for Nanotek’s oxide powder products — but high levels of demand meant distributors were willing to air-freight 60 per cent of ANO’s powder product at their own cost.
Manufacturing was moved from Perth to the US to overcome capacity and logistics limitations, with the hope of significant sales growth.
“When US manufacturing commences, it will generate further operational efficiencies, reduce logistic times to the US and Europe, and result in a reduction in the global sales price to all key distributors, the company said.
“Importantly, we have removed the upper limit production capacity which allows for significant growth in sales,” managing director Geoff Acton told the market in their annual report.
Nanotek’s primary commercial product is a transparent zinc oxide-based broad-spectrum UV absorber used in sunscreens and cosmetics.