Elixinol Wellness Reports Strong Q2 FY24 Performance with Record Revenue Growth
ELIXINOL WELLNESS LIMITED (EXL) Share Update July 2024 Monday 29th
Elixinol Wellness Reports Sustained Growth and Strategic Achievements in Q2 FY24
Elixinol Wellness Ltd (ASX:EXL), a leader in sustainable plant-based nutrition and nutraceutical products, has announced a remarkable 118% increase in revenue for Q2 FY24, marking the seventh consecutive quarter of growth.
Instant Summary:
- Q2 Group revenue up 118% to $3.7M.
- Record Australian revenue of $3.2M, a 29% improvement over Q1.
- Elixinol Americas reports positive EBITDA despite softer revenue.
- Completion of Ananda Food acquisition strengthens market position.
- Cost optimization efforts lead to improved gross margins.
- Cash balance of $1.6M at the end of Q2 FY24.
Revenue Growth
Elixinol Wellness Ltd reported a significant revenue increase in Q2 FY24, with group revenue reaching $3.7M, up 118% from $1.7M in Q2 FY23. This marks the seventh consecutive quarter of revenue growth, with unaudited H1 revenue nearly doubling to $6.8M from $3.5M in the previous corresponding period (PCP).
Australian Market Performance
Elixinol's Australian operations achieved record revenue of $3.2M in Q2, a twofold increase over Q2 FY23 and a 29% improvement over Q1. The acquisitions of The Sustainable Nutrition Group Ltd (TSN) and Ananda Food have significantly boosted sales performance. H1 Australian revenue (unaudited) reached $5.8M, up 174% year-over-year (YOY).
Elixinol Americas
In the Americas, Elixinol reported positive EBITDA despite softer revenue. Online sales grew by 10% over Q1 FY24, and wholesale orders nearly doubled. The transition to a lean e-commerce business model is complete, and with a new Shopify site operational, H2 FY24 sales are expected to improve significantly. The Americas contributed $26K to Group EBITDA in Q2.
Strategic Achievements
The completion of the Ananda Food acquisition at the end of Q1 has solidified Elixinol's leadership in plant-based nutrition in Australia. By the end of Q2, all Ananda food lines had successfully transitioned to Victoria with no impact on delivery performance, and record orders were dispatched in June.
Cost Management
Cost optimization efforts accelerated in Q2 with the implementation of a streamlined organizational structure. Enhanced in-house processing is expected to improve cost of goods sold (COGS) and yield further savings throughout 2024. Gross margins across the Australian portfolio improved to 32% in Q2 from 29% in Q1.
Cash Balance
Elixinol ended Q2 with a cash balance of $1.6M. The closing cash balance was impacted by investments in inventory and one-off costs associated with the integration of the Ananda Food business and facilities. Excluding these one-off costs, operating cash burn was $637K.
Outlook
The Group is pushing towards its FY24 sales target of $16M-$20M and aims to achieve EBITDA break-even in H2 FY24 through significant cost reduction programs and operational gains. Additional marketing activities are expected to support continued revenue growth.
The strong revenue growth and strategic acquisitions are likely to positively impact Elixinol's stock price as investors gain confidence in the company's ability to sustain growth and improve profitability. The positive EBITDA contribution from the Americas, despite softer revenue, is a promising sign for future performance.
Investor Reaction:
Analysts are likely to react positively to Elixinol's sustained revenue growth and strategic achievements. The successful integration of Ananda Food and improved cost management are expected to bolster investor confidence.
Conclusion:
Elixinol Wellness Ltd has demonstrated strong performance in Q2 FY24 with significant revenue growth and strategic achievements. Investors should monitor the company's progress towards its FY24 sales targets and EBITDA break-even. Staying informed on Elixinol's developments will be crucial for making informed investment decisions.