Lark Distilling Co. Releases Q4FY24 and FY24 Financial Results - 29 July 2024
LRK (LRK) Share Update July 2024 Monday 29th
Lark Distilling Co. Reports Q4FY24 and FY24 Financial Results
Lark Distilling Co. Ltd (ASX: LRK) has released its financial results for the quarter ended 30 June 2024 (Q4FY24) and the full fiscal year 2024 (FY24). The report highlights key achievements and challenges faced by the company in both domestic and international markets.
Instant Summary:
- Net Sales revenue for Q4FY24 was $3.3 million, totaling $14.0 million for FY24.
- Sales impacted by slowdown in Chinese Indirect Export channel and soft domestic B2B market.
- Direct export sales in Q4FY24 were $0.3 million, with new markets in Malaysia and Philippines.
- Global Travel Retail sales of $0.3 million in Q4 and $1.1 million for FY24.
- Ecommerce channel saw strong growth, contributing to Core Lark Single Malt Signature collection Net Sales growth of 11% in domestic channels.
- Appointment of Spirits Platform as Lark’s domestic distribution partner starting 1 August 2024.
- Net operating activity cash outflows were $1.4 million for the quarter.
- Cash balance of $2.4 million at 30 June 2024, with $15 million undrawn committed bank facility available.
Financial Performance
Lark Distilling Co. Ltd reported net sales revenue of $3.3 million for Q4FY24, bringing the total for FY24 to $14.0 million. This represents a decrease of $0.7 million and $3.1 million respectively compared to the previous corresponding period (pcp) and FY23. The decline was primarily due to a slowdown in the Chinese Indirect Export channel and soft trading conditions in the domestic B2B market and Lark hospitality venues.
Export and Ecommerce Growth
Despite these challenges, the company saw positive performance in other areas. Direct export sales in Q4FY24 amounted to $0.3 million, driven by initial shipments to new markets in Malaysia and the Philippines. The total H2 direct export sales to new Asian markets under Distribution Agreements reached $0.9 million. Additionally, Lark's Global Travel Retail presence continued to grow, with net sales of $0.3 million in Q4 and $1.1 million for FY24.
The Ecommerce channel also experienced strong growth, particularly through the channel-exclusive Single Cask Program and strong Dark Lark sales. This contributed to an 11% growth in the Core Lark Single Malt Signature collection's net sales in domestic channels, despite ongoing soft trading conditions.
Strategic Partnerships and Financial Position
In a strategic move, Lark appointed Spirits Platform as its domestic distribution partner, effective from 1 August 2024. The transition work is progressing well, ensuring a smooth handover. The company also focused on capital discipline, resulting in an improvement in full-year operating cashflows, excluding government grants, of +$1.2 million for FY24.
As of 30 June 2024, Lark had a cash balance of $2.4 million and a $15 million undrawn committed bank facility available. The Whisky Bank stood at 2.5 million liters, providing flexibility in the stock model to support future growth.
The mixed financial performance of Lark Distilling Co. reflects broader market challenges, particularly in the Chinese Indirect Export channel and domestic B2B market. However, the growth in direct export sales, Global Travel Retail, and Ecommerce channels indicates potential for future expansion. The appointment of Spirits Platform as the domestic distribution partner is a strategic move that could enhance the company's market presence. Investors should monitor the company's ability to navigate these challenges and capitalize on growth opportunities.
Investor Reaction:
Analysts have noted the positive impact of Lark's strategic partnerships and growth in new markets. However, concerns remain regarding the slowdown in the Chinese Indirect Export channel and domestic B2B market. Investor sentiment is cautiously optimistic, with a focus on the company's ability to sustain growth in its export and Ecommerce channels.
Conclusion:
Investors should keep an eye on Lark Distilling Co.'s strategic initiatives and market performance in the coming quarters. The company's ability to leverage its new distribution partnerships and expand its presence in international markets will be crucial for long-term growth. Stay informed on Lark Distilling Co. and other stock market news by subscribing to our newsletter.