Sales and Operational update
LONDON, UK / ACCESSWIRE / August 2, 2022 / Love Hemp Group PLC (AQSE:LIFE) (OTCQB:WRHLF), the brand-led consumer goods company focussed on CBD health and wellness solutions, is pleased to give an unaudited sales and operational update for the full year FY 22 financial period.
- Sales of £3.6m are down 16% from prior year at £4.3m
- H2 sales of £1.9m are 11% up from H1 sales of £1.7m
- Q4 sales of £0.97m are 15% up from Q4 prior year of £0.84m
- 233,987 units sold are up 19% from prior year of 188.865
- 7437 new online customer accounts, total accounts now circa 70,000
- H2 operating costs reduced significantly
- Successful inclusion of all products on the Novel Foods Register
- 2 new major retail listings agreed
Further to the outlook provided on the 31 March 2022 for the half year, the Company is expecting to report total revenues of £3.6 million for the financial year ending 30 June 2022 which represents revenues slightly ahead of management expectations. This result was achieved against a challenging backdrop of the pandemic, the impact on prices from the ongoing geopolitical situation, and extensive delays in the publishing of the UK Novel foods product register which also impacted the working capital of the business. Furthermore, the lower than expected financing earlier this year has also resulted in significant reductions in marketing programmes but despite this backdrop, the Company still experienced sales growth during the second half of the year.
Revenue during the period continues to be UK centric with year-on-year growth delivered in major retail stores and showed revenue of £2.15 million in FY22 up 19%, compared to £1.78m FY21.
Direct to Consumer (DTC) sales continue to be slow via the Company’s own online channels, lovehemp.com and cbdoilsuk.com but have generated 7437 new customers. DTC sales represent 26% of total revenue, down from a 59% share of total revenue compared in FY21. A new Head of Digital commerce has now been appointed to help grow DTC sales.
Love Hemp successfully had all 34 products added to the Novel Foods Register on the 31 March 2022 and with this barrier to entry removed the Company is taking aggressive steps to capitalise on the opportunity. The Directors believe that the combination of new DTC initiatives and the inclusion of Love Hemp products on the Novel Food Register will open the door for many further retail opportunities, increasing sales and building brand equity.
The Company announced on 31 March 2022 that it was initiating a significant operational review of its cost base and operational procedures, due to the H1 trading performance and the limited finance available to it. The review is having a positive impact on the efficiency of the business with group operating costs being reduced significantly in H2, whilst achieving growth in the same period. Additionally, board costs through the restructure announced on 8 July 2022 have also been significantly reduced.
Love Hemp is proud to have positioned itself as one of the leading CBD health and wellness brands in the UK. This has been validated by multiple independent consumer surveys and recognisable industry awards. In November 2021, the Company commissioned an independent survey with Market Measures Limited to better understand the impact of its national TV and media campaign featuring brand partner, and former heavyweight boxing champion Anthony Joshua OBE. A survey conducted on 1000 adults positioned Love Hemp as industry leader with 19% of respondents being aware of the brand as well as the words premium, quality, trustworthy and natural being the most highly affiliated with the brand.
In December 2021 Love Hemp was also awarded ‘Leading CBD brand 2021’ in the Commercial Cannabis awards organised by Global Health and Pharma. Love Hemp is also a nominated finalist for ‘Most Loved CBD brand’ in the World CBD awards due to take place in October 2022.
Tony Calamita, CEO commented; “I am delighted that we have continued to expand our footprint with greater distribution into major retail stores and delivered record sales of product units so more consumers than ever are benefiting from our products. This has been achieved whilst undertaking a significant operational review and I am confident this growth will continue.
The Company plans to make Love Hemp more visible internationally and sales overseas provides a significant opportunity in the future. We are a dynamic and passionate brand that after some challenges is once again on a growth curve with the most powerful and influential brand partnerships in the sector. Now it is our time to really capitalise on the opportunity.”
The Company will continue to drive for sales growth in FY23 with organic growth expected in both its DTC and its retail sales channels. The successful inclusion of 34 products onto the novel foods product register should result in solid growth in the Company’s B2B channels and further increases in building brand equity. As a direct result, the Company has already recently agreed new major retail listings and Love Hemp anticipates launching a range of its products in these new stores and respective online platforms in calendar Q4 of 2022. The Company is also pleased to announce that it is in advanced discussions with a number of other major retailers interested in stocking Love Hemp products and will report progress on these new retail launches in due course.
This coming year Love Hemp plans to invest further in product development and intends to release numerous new products in both ingestible and topical formats. This is expected to give the Company a greater presence in marketplaces such as Amazon and eBay. The products will be designed to meet the specific needs in a number of consumer segments identified including sleep, pain, anxiety, stress, and athletic recovery and will provide another source of potential sales growth.
The Company remains in discussions with a potential new AQSE Corporate Adviser to enable the trading of its shares to be restored and will update the market in due course.