Nutritional Growth Solutions continue to build its US expansion strategy, with the nutrition company making a significant strategic restructure to reduce Selling, General and Administrative (“SG&A”) expenses by approximately US$1.9 million, a 34 per cent reduction in expenses compared to last year.
Focused on Growth
NGS has already made significant structural and cost changes to its US team to focus resources on maintaining sales momentum, margin and growth opportunity, with the net result of these operation measures translating to approximately US$720K in annual savings related to personnel and selling costs.
These moves are set to keep up the momentum of NGS’ growth in the US, with the Company most recently seeing a significant step forward in its partnership with US retail giant Walmart, announcing that NGS products will be stocked in an additional 56 stores from May this year, bringing the total stores stocking NGS products to 456.
Alongside the reshuffle, the Company also announced it raised a total of AUD$1.2 million dollars (before costs) in a placement to sophisticated and institutional shareholders with funds set to be put towards expanding the Company’s US sales strategy and complimentary business acquisitions, with NGS stating that this funding is directly linked to the reshuffle.
Also building the Company’s cash position, Chairman Dave Fenlon and Non-Executive Director Peter Osborne have both opted to be paid reduced fees in deferred equity, demonstrating their commitment as the Company continues to seek further cost-saving measures to build shareholder value.
The Company said that while challenging, these steps were required for NGS to continue to execute its North American expansion strategy.
“Today we announce these extensive changes to “right size” our organization to ensure we have a sustainable and durable business model,” Chief Executive Stephen Turner said.
“The combination of the influx of working capital achieved from significant cost reductions combined with the organisational changes will allow NGS to focus on the core opportunity of building sales of our emerging brand Healthy Heights® and further establishing our leadership position in children’s growth and development in the eyes of our consumers.”
NGS’s Australian Stock Exchange-listed share price is trading at 1.2c (9:39 am UTC+ 8 hours).