Zoono Faces Legal Test Amid Cash Constraints and Market Shift

Financial Performance and Strategic Shift

Zoono Group Limited has reported a notable improvement in its financial results for the year ended 30 June 2025. Revenues increased by 19.1% to NZ$1.25 million, driven primarily by growth in textile sales to Japan and animal health sales in Australia. More importantly, the company has narrowed its net loss after tax by 59%, from NZ$9.09 million in FY2024 to NZ$3.93 million in FY2025. This progress comes amid a strategic pivot away from its traditional business-to-consumer (B2C) model towards business-to-business (B2B) markets.

The transition has involved a shift in focus towards antimicrobial products and a promising shelf-life extension technology developed in partnership with OSY Group Limited. While this change has caused delays in returning to profitability, management expresses confidence that the groundwork laid will enable a turnaround within the next 6 to 12 months.

Shelf-Life Extension Technology and Market Expansion

At the heart of Zoono’s future growth strategy is its collaboration with OSY Group on shelf-life extension technology for fresh produce packaging. This innovation aims to reduce food waste by extending the freshness of fruits, vegetables, meat, and other perishables. The company has secured an exclusive UK supply agreement with Sharpak Aylesham Limited, a leading food packaging manufacturer serving major UK supermarkets.

Trials are underway with multiple UK supermarket chains and international food producers, covering a broad range of products including soft fruits, stone fruits, fish, meat, and ready meals. Early results have been positive, with customers reporting shelf-life extensions that meet commercial viability thresholds. Zoono anticipates initial product orders from Sharpak by the end of September 2025, with revenue expected to ramp up through FY2026.

Beyond the UK, Zoono is actively pursuing opportunities in Asia, including Korea, Japan, China, and India, where regulatory approvals and distributor relationships are progressing. Notably, the company has received KFDA approval in Korea and is focusing on agricultural markets in India, where its products have demonstrated improvements in crop yields.

Capital Raising and Financial Position

To support its strategic initiatives and working capital needs, Zoono completed a non-renounceable rights issue in June 2025, raising approximately AUD 785,000 before costs. The shortfall was subsequently placed with experienced UK investors associated with OSY Group, bringing total funds raised to around AUD 1.78 million. Directors and key staff fully subscribed to their entitlements, signaling strong internal confidence.

Despite the improved financial metrics, the company’s cash reserves remain modest at NZ$51,071 as of 30 June 2025, down from NZ$1.96 million the previous year. The board acknowledges the ongoing dependency on successful sales execution and capital management to sustain operations over the next 12 to 18 months.

Regulatory and Legal Challenges

Zoono is currently defending a prosecution initiated by the New Zealand Commerce Commission, alleging unsubstantiated claims about its hand sanitiser and surface spray products under the Fair Trading Act 1986. The company maintains it has complied fully with legal obligations, supported by over 200 independent laboratory tests worldwide. The court case is scheduled for May 2026, representing a material regulatory risk for investors to monitor.

Outlook and Market Positioning

While the past two years have been challenging, Zoono’s management remains optimistic about the company’s prospects. The focus on niche sectors where its antimicrobial technology offers a competitive advantage, particularly food packaging and shelf-life extension, positions the company to capitalize on growing global concerns around food waste and sustainability. The board emphasizes prudent capital management and continued progress in trials and regulatory approvals as key to unlocking shareholder value.