SATIVA Wellness has posted record first quarter sales of almost £1.4m with its diversification into Covid-19 testing work supporting its CBD operations.
For the three months up to the end of March the company sales hit £1.37m – up by £1.02m on the previous year’s Q1 – whilst gross profit was up 234% to £707,000 compared to £212,000 in the prior year; its adjusted EBITDA loss reduced by 50%.
These results come days after the company completed a £3.3m fund-raise to support its ambitions in the CBD space.
Speaking to BusinessCann Executive Chairman Geremy Thomas said the CBD side of the business is not currently ‘contributing as much as we’d like’ going on to say ‘that is being addressed’.
Not An Easy Space To Make Money
He said: “CBD is not an easy space to make money in, and the wellness business (Covid-19 testing) we identified has helped us subsidise the costs of running the CBD business.
“However, CBD is changing and we welcome moves from the regulator the Food Standards Agency. We are supporters of the Novel Food process. We have spent a lot of time and money with our application which has been lodged.”
He went on to say that the implementation of the UK’s Novel Food rules will shake-up the sector and that Sativa’s new firepower will support its ambitions in this space.
He continued: “A lot of companies have spent a lot of money establishing their brands in the retail market. They have also lost a lot of money – and we have avoided those losses.
“The time is now approaching where we will be more active in the CBD space. We have considered a number of acquisitions. What we have learned is that those players who appear to be very active in the space are actually losing a lot of money, getting that market share.
“Whilst it is attractive in the short term making acquisitions, our focus is to make acquisitions on a merit basis and not to fall into the trap of paying overly generously for a business; rather focus on building them ourselves.”
Sativa: Seed To Sale
Sativa is a seed-to-sale operator with a biomass processing facility in Poland. It produces white label isolates and distillates – with this business growing in the Novel Food era – and CBD-wise it has the Goodbody range.
During the pandemic Sativa previously know as The Sativa Group operated over 30 Covid testing sites, demonstrating its wellness credentials and it is now diversifying into blood tests as people start travelling again.
Mr Thomas, whose family own 30% of the company, returned to an operational role with the company late last year.
He added: “This is the first full quarter results since I returned to take control of the business. We now have a clear direction for the company with revenues up fourfold and EBITDA 50% better. We are making good progress at Sativa – and there are bigger things to come.”
For the company’s 2020 full year results it recently announced an operational loss of £4.5m with Mr Thomas saying this is being reduced and was partly the result of last year’s reverse takeover of Stillcanna. He wouldn’t be drawn on what percentage of first quarter sales were apportioned to its CBD ranges.
Sativa recently appointed Marc Howells as Chief Executive Officer and Anne Tew as Chief Financial Officer.
Mr Thomas added: “The direction of travel is clear. We have a new team and a clear focus on revenue growth. Q2 has started very strongly.”
Sativa is listed on the Aquis Exchange in the UK, the Canadian Securities Exchange, the Frankfurt Exchange and the OTC Markets Group in the US. It has a market cap of £17m.