Why the Lark (ASX:LRK) share price will be on watch today

The Lark Distilling Co Ltd (ASX: LRK) share price will be on focus today after the release of its quarterly update. Here’s the highlights.

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A hipster man holds up a glass of whiskey, indicating a share price watch for ASX wine and gin producers

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The Lark Distilling Co Ltd (ASX: LRK) share price will be in focus this morning following the release of its quarterly update.

At yesterday’s market close, the whisky producer’s shares finished the day at $2.40

How did Lark perform?

Investors could push Lark shares higher today after the company reported robust growth.

For the quarter ending 31 March (Q3 FY21), Lark recorded gross sales of close to $4 million. This reflects a 175% year-on-year increase, in which Q3 FY20 attained a $1.45 million result.

Net sales also soared to $3.1 million for the period, compared to $1.2 million achieved this time last year.

Gross profit came to $2.2 million for Q3 FY21, a stark jump of 210% from the $735,901 reached in the prior comparable period.

Lark attributed its sales performance to the continued growth of its limited release program. Its Legacy and Para100 products are considered rare and extremely expensive, retailing for $1,950 and $1,000 per bottle, respectively.

In addition, the company’s development of key accounts also led to a surge in sales volumes. Online revenue maintained its upwards trajectory, and the hospitality segment saw a recovery as domestic tourism resumes.

Net operating cash outflow for the 3 months totalled $505,000. While this is lower than previous periods, Lark noted that the rise in cash inflows from customers offset operating costs.

The company declared a cash balance of $11.6 million with $5 million in loan facilities. At the current spending rate, this gives Lark much headroom to pursue investment activities (23 quarters).

Lark share price snapshot

Formerly known as Australian Whiskey Holdings Limited, Lark is involved in the Australian craft distilling industry. The company produces whiskey and liqueurs in Hobart, Tasmania.

In the past 12 months, the Lark share price has gone from strength to strength, gaining 200%. Year-to-date performance sits above 60% followed by a recent surge in March. It’s worth noting that the company’s shares hit an all-time high of $2.64 last week and are within sight of breaking that milestone.

On valuation metrics, Lark commands a market capitalisation of roughly $151 million, with 63 million shares outstanding.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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