Yeah nice info here, I think its good idea to make a short snapshot of info that we can post on these threads when newcomers want to know about the company.
ECS is a medicinal cannabis cultivator, growing GMP grade medicinal cannabis organically outdoors and in PCEs (Protected Crop Enclosures) in Victoria Australia off the banks of the Murray River.
In the financial year 2022-2023 ECS produced over 4250 kgs of this medicinal cannabis (this is under the capacity as ECS did not utilise tunnels that were completed this year, going forward our output will be a lot more fully utilising the new PCEs with two harvests a year.)
ECS is selling the product B2b (Business to Business) to Australian medicinal cannabis companies (20+ Australian company contracts) and overseas (6+ International company contracts.) These are multimillion dollar offtake contracts some recent contracts established this year include recurring $3.3 million a year to Germany, $3.4 mill a year to Melboure based Entoura. We have far more demand for our product than we currently can supply.
Along with outdoor fields of cannabis, ECS has 17 PCE (Protective Crop Enclosures) These bring in 700k in revenue a year each (700 * 17) Thats 11.9 million from these alone. ECS will continue to add tunnels to meet demand at a cost of 200k.
Currently ECS is valued at around $25 million market cap, with approx 1100 million shares on issue, of which the Managing director Nan Maree Schoerie is the biggest holder with over 100 mill shares, so her interests are well aligned with shareholders, she built the cannabis farm from the ground up.
Financially we have just had the first cashflow positive quarter in December last year, this will more than likely to continue as we have just had a record harvest completed in May, and May sales were $2.8 million, highest in the companys history, which have not been reflected yet but will be in the June quarterly released soon in July.
We have a debt faciility with NAB currently at $2million which has not been drawn on due to Nans tight money management, this is quite different to other listed cultivators who are 10s of millions in debt like CAN and LGP (the only other two listed cultivators who are nowhere near cash flow positive and are uncompetitive due to indoor energy intensive grows, and have large debts.) Our cashflow and debt facility means we do not require dilutive capital raisings to grow the business.
Going forward ECS still has ODC approval for a further 9 PCEs, which will likely be completed this year (one off cost of $1.8 million that will bring an extra recurring revenue of $6.3 million a year.)
Happy days and bright outlook for sure, if I missed any key info feel free to add, but can always point to this post for a quickupdate on the company.
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