Cellular Goods PLC (LSE:CBX) has said trading in the first quarter of the current year has “improved significantly", with the company looking forward to the future with “cautious optimism.”
The UK-based cannabinoid wellness company said that the first three months of the current financial year have seen sequential growth in revenues, generating sales momentum from a low base.
Online sales continue to grow, contributing 50% of total sales in volume and value, it said.
Amazon sales are expected to receive a boost during the festive season and Cellular said it has had an encouraging start to US orders, which it started shipping to in September 2022.
However, for the year ending 31 August 2022, the group reported a pre-tax loss of £5.9mln compared to a £3.3mln loss in the prior year. This, it said, was due to higher operating costs after a ramp-up in commercial operations and the impact of slower-than-expected sales due to challenging industry and regulatory conditions.
"Despite achieving major operational milestones during the year, significant investment in new products and a broad-scale marketing campaign that meaningfully boosted our brand awareness, it did not translate to our revenue growth expectations due to a challenging market and regulatory environment that is affecting the growth of both the industry and the company,” said Cellular chairman Darcy Taylor in the results statement.
Looking forward, Cellular said it has introduced a streamlining programme to cut costs by 56%, or £3.2mln, annually. The company also recently announced its intention to acquire Cannaray Brands in a reverse takeover to create a “stronger consumer cannabidiol company.”
The company's cash position stood at £4.37mln as of 31 August 2022, compared to £10.3mln a year earlier.