(edited version. I requested that the other post be removed)
Hi
@Dgold,
Thanks for the question. Straight up answer, I think that they actually increased revenues but there was a lag between an invoice and payment (receipts) crossing over Financial Reporting periods. $545,000 reported accrued revenues.
'June 4C page 2 Sub point#2.'**********
Adding a little more clarity to qualify my answer.You ask a good question and raise some relevant points in your post. There are 4 areas in your post that I would like to give a more detailed response to using the June 4C.
" We see a drop in revenue from March to June. Do you think revenues will pick up any time soon?"Here is what I found...
June Quarter Key highlights:* Cann Global continued to drive sales throughout the quarter resulting in cash receipts from customers of $333k up 54.6% on the prior corresponding period, but lower than the prior quarter due to shipping delays and therefore delayed payment on contracted sales.
* Accrued revenue for the quarter including all contracted sales is
$545K up 42% on the previous quarter and an increase of 165% on the previous corresponding period.
*Cash receipts from customers of $333k were up 54.6% on the prior corresponding period, but lower than the prior quarter due to delayed shipping and therefore delayed payment for contracted sales. Accrued revenue for the quarter including contracted sales was $545K up 42% on the previous quarter.
"Directors wages are far to high for these figures."I respect your POV, Dg, but I don't necessarily agree, as they are now managing/overseeing 5 Divisions, and building towards increasing revenues. Industry reports state that the Exec wages are about average for the sector. (chart supplied from Simply Wall Street Jun 2019) That was when they had 3 Divisions.
View attachment 2409695"I think we need a clear business plan on how they are going to turn this around."I will have to refer you to this information taken from the June 4C reports from their 5 Divisions.
https://wcsecure.weblink.com.au/pdf/CGB/02262056.pdf1. FOOD DIVISION
T12 completed its Strategic Business Review and Market study, largely focused on the Australian hemp category, which identified a multi-pronged action plan to see an uplift in sales of natural foods and hemp products. Growth drivers include a stronger direct to consumer/online channel and identification of relevant opportunities in the pharmacy, specialty health foods (with product formats and focus being on the therapeutic value in Hemp) and grocery/supermarket channels (where Hemp as a food component dominates). Plans are underway to grow into these channels with existing partners and new, while at the same time, continue to maintain and grow existing wholesale/distributor channels, locally and in international markets.As part of the food division’s strategy to identify niche wholesale/distributor channels, T12 is collaborating with a big Australian Natural Pet Food & Equine manufacturer to develop market-leading Chia & Hemp Foods, including Equine and plant-based recovery foods.In addition, the development and market introduction of our new Chia Seed Oil and Chia Oil Soft-Gel Capsule started in the last quarter. These new products will bring real benefits to the customers and will see T12 be the first to market Chia products as high in omega content, with fast absorption. Production and manufacturing have begun..New product launch – chia soft-gel capsules (nutraceuticals) have been completed by BioHealth and will begin sales in Q1 2021.Early June 2020, T12 Tasmanian growers confirmed that new season contracted raw hemp seeds are ready for dispatch, in addition to reporting a very successful crop, exceeding the previous year yieldsHemp harvest completed – 200MT crop secured for processing.2. HEMP DIVISION - CGA
*Hemp R&D program with the Uttaradit Rajabaht University currently underway.
*Service revenue and light-capital model.
*CGB expects its 55% owned subsidiary to be operating at a net profit.
3. MEDICAL CANNABIS RESEARCH DIVISION - Canntab & Technion
The company is continuing its discussion with industry partners to develop protocols for randomised clinical trials (RCT) and Cannabinoid Medicine Observational Studies (CMOS) in Australia for the Canntab products and for the products that have been identified in the research being done in conjunction with the Technion in Israel.During the quarter, CGB released a comprehensive announcement with the results to date of the research performed by the Technion in Israel.4. NUTRACEUTICAL DIVISION - Pharmocann
During Q3 FY 2020 CGB initiated a primary market research for the pending launch of the first commercial imperative with its JV partner and Israeli medical cannabis company, Pharmocann, being the plant-based skincare products.During Q4 FY2020, CGB has expanded its Key market research, both quantitative and qualitative, including significant category, consumer, competitor insights, and product, pricing & distribution analysis, across the relevant categories in Australia and global markets, such as Asia, which CGB through its 50% owned JV entity Pharmocann Global Pty Ltd, will expand into.Following research phase 1 and 2, CGB continues to formalise its brand strategy and position, and go to market plans, enabling a smooth entry and with differentiated product offering for consumers. To support this commercialisation phase, CGB strengthened the Marketing department with the appointment of key external agencies across PR, Web, Digital and Brand.5. MINING DIVISION
CGB is progressing with renewal applications and the preparation of the further programs together with the Department of Natural Resources to ensure the company maintains its assets in good standing.CONTROLLING EXPENDITURE
Personally, looking at some of the financials (expenditure) from the other companies, I am glad that CGB, have not unnecessarily exposed themselves to large expenditure commitments that can come from owning/maintaining large farm areas, personnel and real estate costs. In my opinion, if you look closely at those data sets I provided, I think that their somewhat cautious approach with expenditure has helped keep costs manageable during this COVID pandemic. It doesn't mean that they still can't tighten the belt buckle more.
FOR THE FUTURE
What I am actually happy to see is that they do have two fully vertically integrated business models with Food and Pharmaceuticals which means that they have ultimate control over the margins from start to finish. This will eventually give them significant advantages with their bottom line over other companies in years to come 'if' they are successful with their operations. Time will tell.
So....that is my current read on things (opinion). Hope it addresses some of your questions.
Cheers....59
Formerly QBL & CGB rep from 01/02/18 - 17/06/2020.
