SOURCE: Healthzone Ltd.

September 13, 2010 12:07 ET

Healthzone Reports Fourth Consecutive Year of Record Sales and 47.1% Growth in Profit

SYDNEY, AUSTRALIA--(Marketwire - September 13, 2010) - Healthzone Limited (OTCQX: HLTZY) (PINKSHEETS: HLTZY) (ASX: HZL) ("Healthzone" or the "Company"), an international leader in the beauty and wellness sector, has announced a 47.1% increase in consolidated Net Profit After Tax to AU$4.39 million. Sales revenues increased by 8.4% to AU$112.69 million compared to AU$103.93 million for the previous corresponding period in FY2009. Healthzone has lifted EBITDA 42.5% from AU$6.3 million to AU$8.98 million for the 2010 financial year. Earnings Per Share increased by 15.9% from AU$0.069 cents to AU$0.080 cents, despite a 68.1% increase in the number of shares on issue arising from the issue of 32.04 million new shares in the FY2010 year.

FY 2010 Highlights

  • Growth in net assets by $13.14 million
  • Eu Yan Sang Asian Alliance
  • Launch of Healthy Life China -- 100 sites by 2012
  • Established ADR listing on OTCQX exchange
  • Acquired Gold Mist Health Retail Chain
  • Capital Raise Completed

Comments from Executive Chairman Peter Roach...

"The Company's outstanding results have been delivered despite a difficult retail trading environment and are a testament to the success of our strategy to increase profits through the conversion of our low gross profit sales to high gross profit sales and as a result we have grown profits ahead of revenues in a year of significant investment into our own branded products and retail efforts.

"We are very pleased with the performance of Healthzone. The business continues to deliver consistently outstanding results year after year, in contrast to the significant volatility being experienced by the wider retail sector. Healthy Life China will only add to that growth and stability in the future. We have introduced 143 new branded products to our own brand ranges and through a variety of value added services our new distribution business margins are an average of 42% up on the traditional low margin distribution model of our acquired businesses. Our Healthy Life retail business continues to grow with robust revenue growth and margin expansion. Average warehouse purchases by the Healthy Life franchise have grown from 38.3% in FY2009 to 46.5% in FY2010 with increasing support for our own branded products providing over four times the GP margin of third party distributed products to our markets. The Company has outperformed the sector growth of 6.5% in our core market to deliver our fourth year of record sales and profits.

"Healthzone's international growth strategy in markets much larger than Australia have continued to gain momentum and in particular mainland China. Our new alliance partnership with Eu Yan Sang as a 15% investor in Healthzone has provided capital, influence and competitive advantage in Asia with Eu Yan Sang a household name in Singapore, Malaysia, Hong Kong and Macau. Healthzone is partnering with Eu Yan Sang to accelerate the roll out of Healthy Life China as a vehicle for their respective entities to drive their unique yet complementary ranges of Western and Traditional Medicine products in the $30 billion China market growing in excess of 17% per annum.

Outlook

Mr. Roach concluded, "While the challenges of the retail market will remain in the coming year, we are confident we have the people and a solid strategy for growth in Australian and Asian markets. Eu Yan Sang as a new and strategic shareholder will provide influence to deepen our penetration into both emerging and established markets through our own brand and retail strategy in these markets. The initiatives Healthzone has introduced over the last year to expand our customer reach and leverage our 470,000 customer database, to deliver innovative new products, and grow the Asian business have placed the Company well for healthy growth in FY2011."

Financial Statements

Healthzone's financial statements can be found under the financial reports section of Healthzone's investor relations website located at: http://www.healthzone.com.au/Financial.asp

About Healthzone

Healthzone Limited operates a portfolio of distribution, consumer product and retail businesses in the Wellness sector. Each business provides immediate opportunities for earnings growth through business development and integration. Further information; www.healthzone.com.au

Contact Information

  • CONTACT DETAILS

    Healthzone Limited
    Peter Roach
    Executive Chairman
    Tel: +612 9772 7100

    Healthzone Limited
    Michael Jenkins
    Company Secretary
    Tel: +612 9772 7102

    USA

    Grayling USA
    Investor Relations
    Leslie Wolf-Creutzfeldt
    Tel: +1 646 284 9472

    AUSTRALIA
    FCR
    Financial & Corporate Relations
    Ashley Rambukwella
    Tel: +61 2 9235 1666