Cann Group (ASX:CAN) share price sparks on improved outlook

The Cann Group (ASX:CAN) share price is edging higher today, up 2.16%. We take a look at the medicinal cannabis company’s latest results.
The post Cann Group (ASX:CAN) share price sparks on improved outlook appeared first on The Motley Fool Australia. –

asx share price spark represented by smiling lady holding sparkler

Cann Group Ltd (ASX: CAN) shares are edging higher today following the release of the medicinal cannabis company’s financial results for the half year ending 31 December (H1 FY21). At the time of writing, the Cann Group share price is trading at 2.16% higher at 71 cents.

What did the company report?

The Cann Group share price is pushing higher today after the company reported revenue from sales of $1.1 million, up from $600,000 in H1 FY20.

Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at a loss of $4.3 million, a marked improvement from the $7.3 million loss in the prior corresponding period. The company reported an operating loss of $9.4 million, an increase of $1 million from the $8.4 million loss in H1 FY20.

Earnings per share (EPS) of negative 4.98 cents was up from negative 6.00 cents in the prior corresponding half. Cann Group had cash on hand of $27.7 million as at 31 December.

During the half year, the company raised $40.2 million via an institutional placement of $14.3 million and a share purchase plan of $25.9 million. Shares were issued for 40 cents, significantly below the current Cann Group share price of 71 cents.

Cann intends to use the capital, along with a $50 million debt facility from National Australia Bank Ltd. (ASX: NAB), for the construction of its new production facility in Mildura, Victoria. During the half year, the company received the necessary licenses under the Narcotics Drug Act to cultivate and manufacture cannabis at the facility

Commenting on the half-year results, Cann Group CEO Peter Crock said:

While the company experienced some frustrating delays that impacted revenues in the first half, we are extremely encouraged by the building demand for our product from both existing and potential distribution customers overseas and here in Australia. We remain confident that Cann’s growing reputation as a producer of high quality GMP standard medicinal cannabis will enable us to expand market access and build our revenue base over coming periods.

Looking ahead, Crock added:

We are making positive progress on the construction of our state-of-the-art production facilities near Mildura. There is strong momentum behind the business as we continue to see new markets open up and broader acceptance of the benefits of medicinal cannabis.

Noting that overseas sales were impacted by delays caused by COVID-19, Cann Group said some of the revenue it had forecast to be recognised in FY21 is now likely to be recognised in the first half of the 2022 financial year. For that reason, the company revised its full 2021 financial year revenue forecast from $15 million to $8–$10 million.

Cann Group share price snapshot

It’s been a rocky ride for shareholders over the past year. The Cann Group share price is down 29% in 12 months, compared to a flat return on the All Ordinaries Index (ASX: XAO).

However, 2021 has seen a big improvement, with Cann Group shares are up around 18% year to date.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Cann Group (ASX:CAN) share price sparks on improved outlook appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!