Elixinol Wellness has delivered its best quarterly performance in four years, with customer receipts reaching A$4.1 million in Q3 FY24 — the company's highest figure since Q3 FY20.
Group revenue climbed $1.7m (77%) to $3.9m, compared with $2.2m in the same period last year, while Australian sales doubled to $3.3m from $1.6m.
The company credited 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 recorded a 55% increase in seed mix sales from Q2, while Mt. Elephant sales surged 60% to $411k compared with $257k in Q3 FY23.
Non-marketing costs as a share of revenue fell during the quarter, aided by cost-cutting measures and improved operational efficiency.
Gross margins across the Australian portfolio rose from an average of 32% in Q2 to 34%, while Q3 group margins also improved by 3% to 39%.
After the quarter closed, 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 company raised $1.075m through an institutional placement, with proceeds earmarked to complete the acquisition and fund near-term growth initiatives.
A share purchase plan closing on Friday (October 25) has also been launched, giving eligible shareholders the chance to participate on the same terms as placement participants, with a further $500k targeted.
Setting aside one-off costs tied to the final integration of the Ananda Foods business, which Elixinol acquired from Ecofibre earlier this year, operational cash burn in Q3 dropped to $260k — 59% lower than Q2's normalised spend of $637k — equivalent to four quarters of cash runway.
The company held a cash balance of $1m at quarter end on September 30.
Elixinol said it remains committed to 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 morning trading.
