Cann Group Ltd (ASX: CAN) shares are edging higher today following the release of the medicinal cannabis company's financial results for the half year ending 31 December (H1 FY21). At the time of writing, the Cann Group share price is trading at 2.16% higher at 71 cents.
What did the company report?
The Cann Group share price is pushing higher today after the company reported revenue from sales of $1.1 million, up from $600,000 in H1 FY20.
Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at a loss of $4.3 million, a marked improvement from the $7.3 million loss in the prior corresponding period. The company reported an operating loss of $9.4 million, an increase of $1 million from the $8.4 million loss in H1 FY20.
Earnings per share (EPS) of negative 4.98 cents was up from negative 6.00 cents in the prior corresponding half. Cann Group had cash on hand of $27.7 million as at 31 December.
During the half year, the company raised $40.2 million via an institutional placement of $14.3 million and a share purchase plan of $25.9 million. Shares were issued for 40 cents, significantly below the current Cann Group share price of 71 cents.
Cann intends to use the capital, along with a $50 million debt facility from National Australia Bank Ltd. (ASX: NAB), for the construction of its new production facility in Mildura, Victoria. During the half year, the company received the necessary licenses under the Narcotics Drug Act to cultivate and manufacture cannabis at the facility
Commenting on the half-year results, Cann Group CEO Peter Crock said:
While the company experienced some frustrating delays that impacted revenues in the first half, we are extremely encouraged by the building demand for our product from both existing and potential distribution customers overseas and here in Australia. We remain confident that Cann's growing reputation as a producer of high quality GMP standard medicinal cannabis will enable us to expand market access and build our revenue base over coming periods.
Looking ahead, Crock added:
We are making positive progress on the construction of our state-of-the-art production facilities near Mildura. There is strong momentum behind the business as we continue to see new markets open up and broader acceptance of the benefits of medicinal cannabis.
Noting that overseas sales were impacted by delays caused by COVID-19, Cann Group said some of the revenue it had forecast to be recognised in FY21 is now likely to be recognised in the first half of the 2022 financial year. For that reason, the company revised its full 2021 financial year revenue forecast from $15 million to $8–$10 million.
Cann Group share price snapshot
It's been a rocky ride for shareholders over the past year. The Cann Group share price is down 29% in 12 months, compared to a flat return on the All Ordinaries Index (ASX: XAO).
However, 2021 has seen a big improvement, with Cann Group shares are up around 18% year to date.
