Legal Risks and Cash Outflows Cloud Zoono’s Path Despite Contract Wins
Zoono Group Limited reported a reduced half-year loss alongside new exclusive contracts targeting food packaging solutions to tackle global food waste.
- Half-year net loss narrows to NZ$1.24 million
- Revenue declines 28.6% to NZ$507,568 due to fewer orders
- Two exclusive food packaging contracts signed with Mpact and Multisteps
- Operating costs fall 14.7% despite higher selling expenses
- Cash reserves stand at NZ$551,207 with increased operating cash outflows
Financial Performance and Loss Reduction
Zoono Group Limited has reported a half-year net loss after tax of NZ$1.237 million for the six months ending 31 December 2025, a modest improvement from the NZ$1.324 million loss recorded in the prior corresponding period. Despite this narrowing loss, revenue declined by 28.6% to NZ$507,568, primarily due to a reduction in orders from both existing and new customers.
Strategic Expansion in Food Packaging
The company has made significant strides in expanding its antimicrobial product applications within the food packaging sector. During the half-year, Zoono and its partner OSY Group Limited secured two exclusive agreements: one with Mpact Operations, a leading paper, plastics, and recycling business in Southern Africa, and another with Multisteps Pty Limited, an Australian family-owned manufacturer of premium packaging solutions. These contracts mark a strategic push into new packaging formats and geographies, building on prior agreements in the UK and EU markets.
Addressing Global Food Waste
Zoono’s technology aims to extend the shelf life of fresh produce, a critical factor in reducing food waste globally, which is estimated to cost around US$2.6 trillion annually. By enhancing packaging with antimicrobial properties, the company offers benefits across the supply chain, from producers and exporters to supermarkets and consumers, potentially reducing spoilage and improving product freshness.
Operational and Cash Flow Dynamics
Operating costs decreased by 14.7% compared to the prior period, although selling and distribution expenses rose due to commissions linked to shelf-life extension projects. The company experienced an operating cash outflow of NZ$1.39 million, up from NZ$1.14 million previously, reflecting lower sales and cash collections. Nevertheless, Zoono ended the half-year with cash reserves of NZ$551,207 and maintains confidence in its ability to access additional funding if required.
Regulatory and Legal Considerations
Investors should note an ongoing legal challenge from the New Zealand Commerce Commission concerning the marketing claims of Zoono’s product efficacy and longevity. The case is scheduled for court in May 2027. The company remains confident in defending its position, supported by over 200 independent laboratory tests globally.
Bottom Line?
Zoono’s new contracts and cost controls offer a cautiously optimistic outlook, but legal risks and cash flow pressures warrant close investor attention.
Questions in the middle?
- How will the new food packaging contracts translate into revenue growth in the second half of FY26?
- What impact could the NZ Commerce Commission legal case have on Zoono’s market reputation and financials?
- Will Zoono secure additional funding if operating cash outflows continue to rise?
