Why the Ecofibre (ASX:EOF) share price is soaring 9% higher today

The Ecofibre Ltd (ASX: EOF) share price is soaring 9% higher during mid-morning trade after providing an interim investor update. We take a closer look.

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The Ecofibre Ltd (ASX: EOF) share price is on the move during mid-morning trade after providing an interim investor update.

At the time of writing, the hemp company's shares are swapping hands for as much as 86.5 cents apiece, up 9.4%.

What did Ecofibre announce?

Investors are fighting to get a hold of Ecofibre shares following the company's strong recovery of business growth.

In a statement to the ASX, Ecofibre revealed improved momentum in its core United States independent pharmacy business. In April alone, the Ananda Professional pharmacy segment saw its best month since September 2020.

As a result, the company reaffirmed its profit guidance released in February for the FY21 period.

Ecofibre expects profit to come at a loss of $1.5 million for the second half of the year. This will contribute to an overall forecasted loss of around $7 million for FY21.

Pleasingly, the H2 FY21 profit is looking to include roughly US$1.8 million from employee retention credits. The funds to be received fall under former President Trump's 'Taxpayer Certainty and Disaster Tax Relief Act of 2020'. This was a coronavirus relief and spending bill to assist businesses that were forced to close during the government-mandated lockdown.

Ecofibre CEO, Eric Wang touched on the company's progress saying:

Since the middle of March, we have seen a good return to growth in our core independent pharmacy channel as COVID related disruptions subside.

We see trading conditions improving for our core independent pharmacy channel as the US moves into post-COVID environment. We look forward to Ananda Health revenues returning to pre-COVID levels in due course.

Ecofibre share price snapshot

While today's positive announcement lifted Ecofibre shares, yearly performance has not been so kind to investors. The company's share price has fallen more than 70% from the past 12 months and is down almost 60% year-to-date.

Ecofibre has a market capitalisation of approximately $271 million, with about 339.3 million shares on issue.

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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