Wellnex Life Ltd (ASX:WNX, AIM:WNX) shares jumped by a third to 10p after the consumer healthcare group pointed to a sharp improvement in profitability and said it is now operating at breakeven.
In a trading update ahead of its half-year results, the maker of Pain Away said earnings before interest, tax, depreciation and amortisation improved by $2.4 million in the six months to December compared with a year earlier.
Gross margins rose to 31.3%, up from 22.8%, reflecting tighter cost control and better product mix.
Momentum carried into the second quarter. December EBITDA was $0.7 million higher year on year, and the group exited the period operating at breakeven.
Management described this as a key milestone as it heads into the second half of the financial year.
Investors also focused on the performance of Pain Away, its core brand. Quarterly sales reached $3.3 million, while gross margins improved by 7.6%. Heat patches grew 25% in Australian pharmacies, lifting market share to 18.5%. Roll-on products also outperformed the wider category.
Distribution remains a bright spot. Priceline is launching five new products, major wholesalers have agreed new listings and Costco in Australia and New Zealand will trial an exclusive product later this year.