Overview of Advance Zinctek's recent announcement

Advance Zinctek (ASX:$ANO) has announced that Deveraux Specialties in the USA has cancelled the majority of their orders, resulting in an estimated $1.2 million impact on the company's first half sales for FY24. The total revenue for the first half FY24 is expected to be $5.5 million, based on unaudited management accounts. Additionally, the company has outstanding receivables of $90,000 from Deveraux, which is expected to be paid before 18 January 2024. Advance Zinctek is actively seeking new non-exclusive distributors in the US and Canada markets to mitigate the impact of the order cancellations.

Executive Commentary on Recent Developments

We have been notified of the cancellation of the majority of orders from Deveraux Specialties, which will have an estimated $1.2 million impact on our first half sales for FY24. Despite this setback, we are committed to seeking new non-exclusive distributors in the US and Canada markets to diversify our distribution network and minimize the impact of such cancellations in the future. We are also pleased to report that our sales to our largest customer in the USA will not be affected, as we will be shipping directly to them from our Dallas warehouse. We remain focused on implementing the cost reduction strategies and Board initiatives outlined in our previous investor presentation to ensure the long-term sustainability and growth of Advance Zinctek.

Summary of Advance Zinctek's Announcement

Advance Zinctek (ASX:ANO) has faced order cancellations from Deveraux Specialties in the USA, resulting in an estimated $1.2 million impact on the company's first half sales for FY24. The total revenue for the first half FY24 is expected to be $5.5 million, based on unaudited management accounts, with $90,000 outstanding receivables from Deveraux, to be paid before 18 January 2024. The company is actively seeking new non-exclusive distributors in the US and Canada markets to mitigate the impact of the order cancellations. Despite the challenges, Advance Zinctek remains focused on its commitment to cost reduction strategies and Board initiatives outlined in previous investor presentations, while also ensuring the continuity of sales to its largest customer in the USA. Shareholders are provided with the best estimate of sales revenue for the second half FY24, which is expected to be $8.5 million, reflecting the company's efforts to navigate through the changes in the USA market and maintain its growth trajectory.