Yowie Reports $1.9M Annual Revenue Hit; Clarifies $4.6M Loan Discrepancies

• Material reduction in store facings expected to cut revenue by up to US$1.9 million annually
• Clarification on PRFG Loan as court security, not a direct loan to liquidators
• Discrepancies in loan disclosures with Keybridge Capital Limited addressed
• Keybridge’s insolvency raises questions on loan recoverability and Yowie’s financial position
• Yowie confirms compliance with ASX continuous disclosure rules and board approval of responses

Background on Revenue Impact

Yowie Group Ltd has publicly addressed ASX queries following its April 7, 2025 announcement that a major customer’s store layout changes will materially reduce Yowie’s product facings. This adjustment is expected to result in up to US$1.9 million less in annual revenue, a significant hit given Yowie’s reported sales of approximately US$14.7 million for the 2024 financial year.

The company first learned of the store facing reductions in mid-March 2025 but delayed disclosure until early April to explore potential product substitutions and accurately assess financial implications. Yowie maintains that this timing complied with ASX continuous disclosure obligations.

Loan Arrangements and Disclosure Complexities

Central to ASX’s scrutiny were Yowie’s financial dealings with Keybridge Capital Limited (KBC) and PR Finance Group Limited (PRFG). Yowie clarified that what was initially described as a "loan to the liquidator of PRFG" is more accurately an investment secured as funds deposited into a Supreme Court trust account, serving as security for costs in ongoing litigation. This distinction, while nuanced, is material from a disclosure perspective.

Further, Yowie detailed a Reciprocal Loan Agreement with KBC, under which it deposited between US$2.8 million and US$4.6 million at various times, earning interest. Discrepancies between Yowie’s and KBC’s disclosures, particularly regarding the loan’s maturity and outstanding balances, were attributed to reporting oversights and currency conversion differences.

Keybridge Insolvency and Financial Condition

Complicating matters, KBC entered voluntary administration in early 2025, triggering concerns about Yowie’s ability to recover its loans. Yowie asserts it has lodged proofs of debt and believes, based on KBC’s audited financial statements and net tangible asset announcements, that sufficient assets exist to cover liabilities owed to Yowie.

Despite cash constraints, Yowie reported only US$269,000 in cash at the end of December 2024, the board maintains reasonable grounds to believe the company can continue as a going concern. This confidence is supported by cost-saving measures, potential capital raising, and financial support letters from KBC.

Compliance and Governance

Yowie confirmed full compliance with ASX Listing Rules, particularly continuous disclosure obligations under Rules 3.1 and 3.1A. All responses to ASX queries were reviewed and approved by the entire board, underscoring governance oversight amid challenging circumstances.

However, the ASX correspondence reveals tensions around timing and completeness of disclosures, especially regarding the characterization of loans and the financial health of related parties. These issues highlight the complexities faced by listed entities in managing intertwined financial arrangements and legal proceedings.

Looking Ahead

Yowie’s situation remains fluid as it navigates the fallout from reduced retail presence and the administration of a key financial counterparty. Investors will be watching closely for updates on loan recoveries, capital raising efforts, and any further ASX disclosures that could impact the company’s valuation and operational outlook.

Bottom Line?

Yowie’s detailed ASX responses clarify key financial risks but underscore ongoing uncertainties tied to Keybridge’s administration and revenue pressures.

Questions in the middle?

• What is the timeline and likelihood of Yowie recovering loans from Keybridge’s administration?
• How will the US$1.9 million annual revenue reduction affect Yowie’s profitability and cash flow in FY2025?
• Will Yowie pursue further capital raising or strategic partnerships to bolster its financial position?