Just chucked my poorly written post into chat GPT that spruiked it up a little, amazing times we live in:
ECS is an esteemed medicinal cannabis cultivator operating in Victoria, Australia, situated alongside the picturesque Murray River. With a strong commitment to organic practices, ECS specializes in the production of GMP grade medicinal cannabis, employing both outdoor cultivation and state-of-the-art Protected Crop Enclosures (PCEs).
During the financial year 2022-2023, ECS achieved an impressive yield of over 4250 kilograms of medicinal cannabis. It's important to note that this output was achieved without utilizing the 6 newly completed PCE tunnels. Moving forward, ECS anticipates significantly higher production levels by fully leveraging the capabilities of the new PCEs, enabling the company to conduct two harvests per year.
ECS has successfully established lucrative business relationships, operating on a Business-to-Business (B2B) model with over 20 Australian medicinal cannabis companies and six international counterparts. These collaborations are underpinned by multimillion-dollar offtake contracts, including recent agreements such as a recurring $3.3 million per year contract with German based companies and a $3.4 million per year contract with Melbourne-based Entoura. The company is witnessing substantial demand for its products, surpassing its current supply capacity.
In addition to its outdoor fields, ECS boasts an impressive collection of 17 Protective Crop Enclosures, each generating annual revenues of $700,000. The cumulative revenue from these enclosures amounts to $11.9 million per annum. To meet the growing demand, ECS plans to expand its infrastructure by adding more tunnels, with an estimated cost of $200,000 each tunnel.
Presently valued at approximately $25 million in market capitalization, ECS demonstrates its commitment to shareholders through the significant holdings of Managing Director Nan Maree Schoerie, who possesses over 100 million shares. Schoerie's extensive ownership aligns her interests closely with those of shareholders, as she has played an instrumental role in establishing and nurturing the company's cannabis farm.
Financially, ECS achieved a major milestone by attaining positive cash flow in the December quarter of the previous year. This positive trend is expected to continue following a record-breaking harvest completed in May, with sales reaching $2.8 million, the highest in the company's history. The financial results for this successful period will be released in the upcoming June quarterly report, which is anticipated to further reinforce ECS's positive trajectory.
ECS maintains a debt facility with NAB, currently standing at $2 million. Notably, this facility remains untapped due to Nan's prudent financial management. This distinguishes ECS from other listed cultivators, such as CAN and LGP, which carry debts in the tens of millions. ECS's robust cash flow and debt facility obviate the need for dilutive capital raisings, ensuring sustainable business growth.
Looking ahead, ECS holds ODC approval to build and grow cannabis in an additional 9 PCEs, expected to be completed within the current year. This expansion project entails a one-time cost of $1.8 million and is projected to generate an additional recurring revenue stream of $6.3 million annually.
With an optimistic outlook and promising prospects, ECS epitomizes success in the medicinal cannabis industry. This summary captures the key information about the company, serving as a reliable point of reference for stakeholders seeking an update on ECS's thriving operations.
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