18 Jul 2014

Energy Mad to switch to LEDs

10:55 am on 18 July 2014

Energy Mad expects to begin making profit in the first half of the fiscal year, although its efforts to make money as a publicly listed company have so far failed.

Chair Rick Ramsay told shareholders at its third annual general meeting that the company had failed to deliver profitability, but it expected to be more successful as it moved away from selling compact fluorescent lamps in favour of LEDs.

The energy efficient lightbulb seller lost $5.7m in the year ended March.

It would also cut costs in its efforts to make the company profitable.

Energy Mad's founder and managing director, Chris Mardon, said the company had developed a scalable model for profitablity.

He said as a listed company it was supposed to meet certain targets but, rather than making excuses, the company was fronting up and admitting it hadn't met those targets.

Instead of focussing on old technology, the company was switching to selling LEDs, he said.

"LEDs have improved dramatically from a price and performance point of view, and we've realised that because there's a lower uptake of LEDs - somewhere round 1 percent - it's creating a big market opportunity for Energy Mad."

Mr Mardon said although the company was still selling large volumes of compact fluorescent lamps in Australia, it was moving to a "direct to consumer" model in New Zealand, as well as further afield, which meant demonstrating and doing the sale in people's homes.

He said the company was confident in the new model.

"We've grown sales rapidly and it is a variable scale model - in other words it's commission-only for our sales consultants, and we can scale fast without having to employ people."

Mr Mardon said although it could not give any figures yet, Energy Mad was expected to have a "better feel" by September and at the half-year would be able to give guidance as to what its profitability would be for this financial year.