Earbud sales a hit for wearable tech play Nuheara – but loss hits $4.2m
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Hearables innovator Nuheara is selling more of its earbuds than ever but it is still not enough to get the company out of the red.
For the half year it reported 7,797 sales of its ‘world’s most intelligent earbud’ that can control noise levels and amplify speech.
But producing the tech comes at a significant cost, the company finishing the half year at a loss of $4.2 million.
Shares in the company (ASX:NUH) fell 5 per cent to 6c on Wednesday.
The loss was 150 per cent worse than the same period last year — but Nuheara told investors the comparison was not valid.
“A comparison between the two periods cannot be fairly made as this was impacted by the company’s pre-commercial production status in the preceding period. Shipping only commenced in January 2017, and with many orders on back-order until the April-June 2017 quarter.”
The period saw the first full-scale production of its products, which were initially crowdfunded back in 2016.
Since then, the company has expanded its presence online with agreements with retail giant Amazon as well as bricks and mortar in the US, Europe and the Middle East.
But the onboarding of stores wasn’t happening as fast as Nuheara hoped, the company describing the lag as “of some detriment to overall sales”.
Moving forward, chief Justin Miller touted a reduction in the cost of goods sold (COGS) as a key driver for future profits.
“This result is a real milestone for our company that has importance beyond the fantastic sales growth we experienced,” Mr Miller told investors.
“The cost efficiencies we were able to achieve in manufacturing and logistics are just as important to the longterm viability of any business.
“As such, our growth in sales, reduction in COGS and the increase in GP [gross profit] margins, are all very positive signs for a rapidly maturing business.”
Overall, revenue for the period was $1.9 million, an increase from nil in the same time last year.