Little Green shares finished yesterday’s close at 84 cents, before dropping to an intraday low of 80 cents after the market open. Currently, the Little Green Pharma share price is trading flat at 81 cents.
Here we cover the moving parts in Little Green Pharma’s results in finer detail.
Quick recap on Little Green Pharma
Little Green Pharma is a medicinal cannabis pure-play that cultivates and produces products for the medicinal cannabis industry.
It also has a hand in research and development (R&D) plus the manufacturing and distribution of these products in the Australian market.
The company’s operations are vertically integrated, meaning it has full control over its entire supply chain for efficiency purposes.
Little Green Pharma has a market capitalisation of $188 million at the time of writing.
Little Green’s quarterly results
The company recognised revenue of $600,000 this quarter, with cash receipts totalling $1.82 million, up 20% from the previous quarter.
The discrepancy between revenue and cash receipts boils down to “a change in wholesaling agreements” that the company realised this quarter.
In a nutshell, Little Green had to revise its agreements with all Australian distribution partners after the Therapeutic Goods Association (TGA) updated its clarifications “regarding wholesaling rules for unregistered medicines”.
The change enforces the company to recognise revenue only when its product is sold to the pharmacy, instead of when it is sold to the wholesaler.
Consequently, the company recognised a significant down-step in revenue from the previous quarter, when it recorded revenue of $2.3 million.
Little Green anticipates revenue trends to normalise by the next quarter and estimates revenue of $3 million for Q1 FY22.
In other recent updates, Little Green last week completed the acquisition of a medicinal cannabis facility in Denmark for $10.9 million.
As a result, it recorded increased production and staff costs “associated with the Denmark facility”.
Little Green labelled the facility as “one of the largest production assets in Europe”. In addition to improving efficiency, it produced more than 20 tonnes of biomass annually, including over 12 tonnes of “dried cannabis flower”.
Offsetting these expenditures, the company completed a capital raise of $26 million “net of costs”, with “strong support from institutional and sophisticated investors”.
Moreover, Little Green realised a “record growth in underlying patient demand”, adding a 37% increase to new patients and 25% increase in dispensed products.
This brings the total of new patients and products dispensed to 3,300 and 11,200 respectively.
Little Green Pharma share price snapshot
The Little Green Pharma share price has posted a year to date return of 43%, extending the previous 12 month’s return of 122%.
These returns have outpaced the S&P/ASX 200 Index (ASX: XJO)’s return of ~23% over the past year.
Additionally, Little Green finished the quarter with $40 million in cash on its balance sheet.