Selling individual business units, or even the company as a whole, remain on the table for Elixinol Wellness as it continues a strategic review.
In a move to “maximise shareholder value”, the company said it is considering a “merger, sale or other options for the company as a whole or its business units”.
The update emerged as Elixinol reported a revenue decline of 35% to A$1.5 million in the three months to March 31.
It blamed post-Christmas seasonal softness, a sluggish CBD market in the US and the lingering effects of Covid for the decline.
Revenue from Hemp Foods Australia fell 27% as it faced seasonal headwinds, a new wave of Covid infections and flooding, which all hit sales, it said.
But it insisted trading conditions were improving.
“Supported by new products and an improving market, Hemp Foods Australia has reported a stronger start to Q2,” the company said. “After a successful launch of new products into Costco in Q4, purchase orders received in April have already exceeded the total received during all of Q1. Additionally, distribution of our seed products has been confirmed for a new Costco store scheduled to open in Auckland in August 2022.”
Meanwhile, revenue from Elixinol Americas fell 34% to $713,000, which it partly blamed on an oversupply in the CBD category.
Operating expenditure in the quarter hit $3.3m, a slight increase from the previous quarter as it invested more cash in product development.
Elixinol said its cost base has been “significantly reduced” since the start of the strategic review. Savings of $3.2m have been identified, including a reduction in corporate costs of $1.2m following the exit of senior management, among them former chief executive Oliver Horn who stepped down in March who remains a non-executive director.
The company finished the quarter with funding of $10.8m.
