Cantourage
Cantourage Group reported its Q3 financial figures this week, celebrating ‘significant revenue growth’ so far in 2023, but slipped back into the red after reporting a positive EBITDA in its interim results in July.
In a market update earlier this week, the German-listed cannabis distributor Cantourage reported Q3 revenues of €6.1m, up from €3.4m in the same period a year earlier.
This equated to revenues of €17.2m in the first nine months of the year, marking an 85% increase on the €9.3m it made in the first nine months of 2022.
EBITDA for the quarter fell to a loss of €0.6m, which was down significantly on the €1.2m loss recorded in the same period a year earlier.
This saw the company’s EBITDA for the nine months of 2023 fall to a loss of €0.4m, after reporting positive pre-tax profits of €200k in its interim results.
Cantourage attributed this loss to ‘delays in the approval of new production facilities’, among other factors, but said it maintained its ‘previous forecast of a balanced EBITDA’ and double-digit revenue increases for the full year.
This optimistic outlook is due to expectations of ‘significant efficiency gains in a rapidly growing market’, the effects of which are expected to begin being felt in the current quarter.
“Our business development was successful in the first nine months of 2023,” Cantourage’s CFO Bernd Fischer said.
“In addition to the increase in revenue, we were also able to successfully implement our planned milestones for further company development – such as the launch of our own online platform for cannabis on prescription called Telecan°. As a result of this and cost-saving measures, we expect to achieve our forecast business development for 2023 as planned.”
Post period, Cantourage also cited its recent tie-up with Astrasana, which it says it expects to mark a ‘significant development for the supply of cannabis in Switzerland’.
Europe’s last cannabis-focused ETF closes
The Rize Medical Cannabis and Life Sciences UCITS ETF (FLWR), Europe’s last remaining cannabis-focused ETF, is due to close in December.
The medical cannabis ETF will see its last day of trading on December 12, according to the company, which said it was set to close four ETFs earlier this month amid efforts by new management to streamline its portfolio.
Rize’s cannabis fund is the largest of the four set to be closed by the end of the year, currently holding nearly $14m in net assets, nearly twice the size of the next largest ‘Education Tech and Digital Learning’ ETF, worth around $7.5m.
As ETF Stream reports, FLWR was one of two debut products launched by Rize three years ago, and was instrumental in driving the company’s assets under management (AUM) to more than $100m within a year of launching.
However, following the acquisition of Rize ETF by Ark Investor in September, the new parent company said it felt the closure of the four funds, each of which has remained below $50m for 30 consecutive days, was in the ‘best interests of investors’.
The closure of Europe’s last remaining cannabis specific ETF comes just weeks after the closure of its first.
In September, HANetf announced that its Medical Cannabis and Wellness UCITS ETF (CBDX) fund, also launched in 2020, is set to be merged with a second fund, as it is ‘no longer viable’.
With HANetf stating that it expected no improvement in value ‘in the short to medium term’, it now plans to merge the fund with a wider healthcare ETF, HAN-GINS Indexx Healthcare Megatrends Equal Weight UCITS ETF (WELL).
SEED Innovations
SEED Innovations, the AIM-listed cannabis investment company, also reported financial figures this week, covering the six months to September 30, 2023.
The net asset value (NAV) of its portfolio fell from £16m to £14.6m during the period, a decline the company attributed to the ‘negative revaluations’ of its investee companies Northern Leaf and OTO as both raised funds at discounted prices. It also cited the further decline in the market price of Little Green Pharma and Portage.
As the company’s CEO, Ed McDermott, pointed out in a market update yesterday, this still placed its NAV significantly higher than the company’s current market cap of just under £6m. The company’s ‘cash and future contracted receivables’ were also above its current market value, at £7.1m.
“We believe we are significantly undervalued and that the company’s shares, currently trading at approximately a 64% discount to net asset value, represent an attractive investment opportunity.”
Alongside its ongoing share buyback scheme, the company has reportedly ‘committed to increasing our visibility and accessibility to investors’ in an effort to ‘increase the understanding of SEED’.
This week Jersey-based Northern Leaf, in which SEED owns 1,236,331 shares representing 3% of its NAV, announced that it had successfully completed its first commercial shipment of medical cannabis to the UK.
The company’s chief executive, Don Perrott, said: “After four years of preparation to complete our state-of-the-art facility and achieve our GMP status, to supply patients at home and abroad with a high quality product is a remarkable achievement.”
He added that the company will shortly have a ‘range of new strains available to patients in the European and rest of the world markets to compliment the launch of our first product’.
In SEED’s final results for March 2023, it revealed that it had converted a £600k Convertible Loan Note as part of a wider equity raise of around £3m, seeing SEED acquire a 2.2% stake in Northern Leaf, then valued at £960k.
However, it stated in its recent interim results that ‘poor public market conditions’ had worked against Northern Leaf’s IPO ambitions.
“Whilst work on an IPO continues, if successful, it will likely be at a lower price than that at of the last equity raise. As a result, we have reduced our carrying valuation by a little over half to £443,000 to reflect either the risk of an IPO at a lower price or indeed of a listing not progressing and the resultant pressures of raising further private funding.”
