Chill Brands Group PLC (LSE:CHLL, OTCQB:CHBRF) reported annual results for the year to March but highlighted how it has significantly changed its business model in the months since.
Under chief executive Callum Sommerton, who was promoted from international brand director in April, the producer and retailer of CBD products and related consumer goods said it has been working to eliminate costs and refine its operating model.
During the past year, the group had been focused on increasing its physical retail footprint as part of a distribution deal with major shareholder Ox Distributing, but since the year end Sommerton has ended this agreement.
With the focus more fully on digital sales via the Chill.com website, the domain name it completed ownership of last year for US$1.6mln, the group is now focused on establishing and extending new relationships with retail and distribution partners as part of a "more conventional path" to generating revenues from product sales.
For the past year, revenues of £624,187 were reported, up 95% from the prior year, though £447,814 of this reflected an agreement with Ox.
Losses after tax increased to £5.6mln from £4.8mln the year before.
At the March year end, the group held £420,045 at the bank, which it has since topped up with a £3.5mln fundraising in April and a £0.2mln open offer in June.
“Both as a result of shifting strategies and changing market conditions, this period has been transformational,” said Sommerton.
“Since the end of the period in review, the group has taken strides to reduce spending and address issues with its distribution model. Marketing schemes that did not yield consistent results have been replaced with strategies that are intended to provide a firm foundation for growth, with an emphasis on reaffirming the position of the group's products within the retail environment.
“Our continuing base of activity can now be broadly categorised as brand building on a budget, where it is understood that each penny spent must push us closer to self-sufficiency.”