Elixinol Wellness has reported its strongest quarter in four years, with customer receipts topping A$4.1 million in Q3 FY24, the firm’s best performance since Q3 FY20.
Group revenue increased by $1.7m (77%) to $3.9m, up from $2.2m a year ago, while Australian sales doubled to $3.3m, up from $1.6m.
The company attributed the “sustained growth” to a “strong performance in the grocery channel, supported by solid baseline sales, increasing brand loyalty, and well-executed promotions”.
E-commerce sales also gained momentum across the group.
Elixinol said Hemp Foods Australia delivered “another outstanding quarter”, particularly in
the grocery channel which reported a 55% increase in seed mix sales from Q2, while Mt. Elephant sales surged 60% to $411k compared with $257k in Q3 FY23.
Costs as a percentage of revenue (excluding marketing) fell in the quarter, driven by cost cutting and operational efficiencies.
Gross margins across the Australian portfolio rose from an average of 32% in Q2 to 34%, while Q3 group margins also increased by 3% to 39%.
Post quarter-end, the company signed a binding agreement to acquire The Healthy Chef, a complementary lifestyle brand.
“This acquisition is expected to boost revenue, margins, and EBITDA, while unlocking new scaling and cost-optimisation opportunities across Australia and the US,” Elixinol said.
The firm has raised $1.075m through an institutional placement, the proceeds of which will be used to finalise the acquisition and drive near-term growth initiatives.
It has also launched a share purchase plan closing on Friday (October 25), offering eligible shareholders the opportunity to participate on the same terms as placement participants, targeting an additional $500k.
Excluding one-off costs from the final integration of the Ananda Foods business which it acquired from Ecofibre earlier this year, operational cash burn in Q3 was reduced to $260k, 59% lower than Q2’s normalised spend of $637k, and equating to four quarters of cash runway.
The firm had a cash balance of $1m at quarter end (September 30).
Elixinol said it remains focused on achieving its stated FY24 sales target of $16m-$20m.
“Although revenue is expected to land at the lower end of the range, the path to EBITDA break-even remains achievable,” it said.
“The group’s ‘House of Brands’ strategy and strategic acquisitions have been driving revenue recovery, accelerating sales growth and creating synergies over the last 12 months.
“With eight consecutive quarters of uninterrupted revenue growth, the company is now strategically positioned to reach its performance milestones as 2024 draws to a close.”
Shares climbed 12.5% from $0.004c to $0.0045c in this morning’s trading.
