Elixinol Global has told the ASX it is on track to deliver quarter-on-quarter revenue growth of 10-15% in Q3 FY2020 while reducing operating and corporate costs by 45% compared to FY2019.
Despite the impact of Covid-19, the company reported all regions where it operates are on track to grow revenue in the quarter.
After the sale of Hemp Foods Australia to Chinese buyer Shanghai Shunho New Materials Technology fell through in May, the company said the business had continued to grow, with an improved margin throughout the quarter.
As well as marketing HFA-branded products, the team is developing bespoke Elixinol products for distribution in Australia which will be distributed by. PharmaCann under schedule 4 of the Therapeutic Goods Administration (TGA) Special Access Scheme.
The company said it is assessing the TGA’s interim decision on down scheduling CBD in Australia for new commercial opportunities.
Elixinol Americas returned to growth in the quarter after focusing on higher margin, consumer-led branded nutraceuticals and Elixinol-branded products as well as e-commerce to drive sales during the pandemic.
In Europe, the company’s partnership with the UK’s third-largest pharmacy chain Well Pharmacy saw it launch five Elixinol-branded CBD products across 80 stores with distribution set to be expanded to more than 500 stores and three new custom-developed products added to the range.
These are the first full-quarter results under Group CEO Oliver Horn who said: “We are delighted to be seeing very encouraging results across all our key reporting metrics and through each business unit as a result of the decisive repositioning efforts implemented through H1 FY2020.
“Our strategy to focus on Elixinol-branded consumer goods and higher margin consumer channels, such as ecommerce, is translating to revenue growth and margin improvement. Our reduced cost base has significantly reduced operating cash outflows.”