The ever-popular chocolate brand Yowie is going through tough times after its assets were wrongly valued – forcing the company to hit a huge hit
- Yowie Group adds an additional value reduction of US $ 500,000 to its operating results
- Re-evaluation was activated when it appeared that the market capitalization was lower than the net assets
- Popular chocolate brand hit by increased American competition in difficult market
Yowie Group, which owns the popular chocolate brand Yowie, suffered an unfavorable impairment of US $ 500,000 after it discovered that its assets were overvalued.
The amount was worth about $ 740,000 from Friday afternoon exchange rates.
Yowie characters such as Boof, Squish and Crag have been a popular treat for generations since the chocolate-covered toy was launched by Cadbury in 1995.
Generations of children grew up with Yowie chocolates since the candy with a surprise in it was launched in Australia in 1995 and became an instant hit
The Yowie was wildly popular and sold 65 million units in Australia in its first year, the ABC reported, outsourcing its biggest competitor, Kinder Surprise.
Cadbury stopped making the chocolates in 2005 after a dispute with the creators of the characters, authors Bryce Courtenay and Geoff Pike, about the rights to sell the chocolates worldwide.
The brand was re-launched in 2014 in the US by the Yowie Group, which outsources chocolate making.
The company focused on the competitive American market with a combination of chocolates plus Yowie brand character-controlled computer games and applications and then entered the Australian and New Zealand markets in 2017.
The group ran into problems at the end of June when it turned out that market capitalization was lower than its net assets, the non-executive chairman of the company, Louis Carroll, told the Australian Securities Exchange (ASX) on Friday.
This led to a impairment test, which reassessed the group's assets, Carroll said.
& # 39; The Board of Directors has completed the impairment test, the outcome of which indicated that an additional impairment loss of US $ 0.5 million had to be booked against the fixed assets of the Group, & # 39; said Carroll.
Yowies disappeared from the shelves when Cadbury stopped making them, but returned with the new company Yowie Group focused on the US market. Yowie Group reported an unexpected write-down on its assets on Friday and posted an additional write-off of US $ 500,000
The write-off left a sour taste for shareholders of the brand licensing company, after an unsatisfactory year in which the total losses amounted to US $ 5.5 million ($ 8.1 million), the ASX release said.
The company accused an 18 percent decrease in global net sales of increased competition in the US in its preliminary final report published on August 30.
A global & # 39; surprise-in & # 39; competitor, launched in December 2017 and the best-selling chocolate, had made huge market share gains and expanded its leadership position, the report said.
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