ECS Botanics achieved positive operating cashflow of A$282,000 in Q1, FY24, with revenue climbing 78% compared to the same period a year earlier.
Revenue eased from Q4, FY23's record A$4.8 million to A$4.1 million, though the company noted this movement was consistent with historical seasonal patterns.
ECS informed the ASX that it holds a healthy cash balance of $2.5 million as of September 30, 2023, and that its $2 million loan facility with National Australia Bank (NAB) has not been drawn upon.
Orders for medicinal cannabis oils hit a record 106,000 units during the quarter, more than doubling the previous high of 50,624 units recorded in Q2, FY23 — a rise of 109%.
Earlier this month, the company finalised a $24 million off-take agreement with Medicann Health to supply medicinal cannabis dried flower over a five-year term, bringing the combined value of major off-take agreements signed over the past ten months to $48.5 million.
ECS has also entered into a formal partnership with Steritech, through which it will be able to provide GMP contract packaging services to customers seeking to import medicinal cannabis dried flower.
On the R&D front, ECS reported that its project to introduce heating and lighting inside a protective cropping enclosure — aimed at testing the viability of winter cultivation — is showing "very promising signs". Harvest is expected in late October, at which point the THC content of the winter crop will be evaluated.
The company added: "The trials of different phenotypes have also highlighted some stand-out genetics that will be developed for use in the December /January plantings."
Managing director Nan-Maree Schoerie attributed the positive cashflow result to a 58% increase in cash receipts from customers compared to Q1, FY23, saying it was "further demonstrating the robustness of our business model and financial stability".
She added: "While revenue was slightly down on Q4, FY23, the last quarter of the financial year is traditionally strong due to customer buying patterns.
"We are pleased to see a 78% revenue increase on the previous corresponding period, showing the sustained growth of the business."
"Additionally, we are experiencing a steep increase in demand for our medicinal cannabis oils with over 100% growth in orders compared with the highest previous quarter, which will be delivered in the second quarter of this financial year.
"We have commenced FY24 with strong momentum and a growing portfolio of off-take agreements and orders, underpinned by a strong financial model."
