Love Hemp
British CBD firm Love Hemp, which collapsed into administration earlier this year, is reportedly pushing to be relisted on the stock market later this year.
The Mail on Sunday reported that Portillion Capital which purchased the company out of administration in February for an undisclosed sum, have been investing heavily in the firm.
As a result of their investment, they expect Love Hemp to make nearly £28m in sales over the next 12 months.
In its last reported full-year financial statement, Love Hemp said it made £3.6m in the year to June 30, 2022, down 16% from the £4.3m reported a year earlier, both a fraction of Portillion’s ambitious target.
Furthermore, Love Hemp is reportedly planning to raise money over the summer aiming to achieve a valuation of £25m before targeting a listing on the London Stock Exchange or an exchange in the US if it secures private funding.
According to Companies House, the book value of Love Hemp’s assets as of March 23 2023 was just over £1.5m.
Before the company’s shares were suspended from the Aquis Stock Exchange last year, Love Hemp had a market cap of just over £5m.
Should Portillion manage to list Love Hemp’s stock on the LSE, it will have accomplished what its previous owners were never able to, and would mark the first CBD brands to launch since Cellular Goods in 2021.
There has been little appetite for CBD stocks over the past year, with LSE-listed Cellular Goods and Chill Brands both seeing dramatic declines in share price.
Similarly, smaller CBD companies listed on Love Hemp’s former Aquis Stock Exchange, including the likes of Yooma Wellness and Voyager Life, have also seen significant declines.
The CBD retailer first announced its plans to launch onto the Standard Segment of the LSE in November 2021, and the process was initially expected to take around three months to complete.
On December 3 2021, a month after Love Hemp announced its intention to target an uplisting, the Financial Conduct Authority (FCA) raised the minimum market capitalisation for companies in both the Standard and Premium segments of the main market from £700k to £30m.
While it is understood that Love Hemp submitted its application to list on the LSE before these changes were implemented, its market cap has plummeted from £21m to just over £5m in the time since its application.
In September 2022, Love Hemp said it had abandoned its plans after the FCA ‘confirmed to the Company that the review of its application has lapsed due to the passage of time.’
SEED Innovations
AIM-listed investment vehicle SEED Innovations published its full-year financial results this week, pointing to macroeconomic factors for what it described as a ‘challenging year’.
In the 12 months to March 31, 2023, SEED saw its net asset value drop by around £3.5m to just over £16m.
It attributed this decline to ‘continuing, macroeconomic and political factors impacting stock market stability’, adding that it still faced a ‘rather volatile appetite for public markets and investor activity’.
Diving into its portfolio, it said the negative movement was in part down to the ‘negative revaluation of Leap’, a gaming company it sold in December 2022 for an enterprise value of €14 million.
According to SEED, the expected total blended return on investment for Leap was around 4%, a number it says was skewed by losses made on units purchased at high prices in 2018.
Yooma Wellness also continues to ‘perform poorly’, and is now written down to zero, with ‘little chance of recovery in fortunes expected and existing businesses being sold down to cover costs’.
Conversely Little Green Pharma, Northern Leaf and South West Brands, which was recently sold to CBD brand OTO performed more positively.
The post-period sale of South West Brands generated a total return of £590,000, a blended return of 1.18 times the original investment.
Northern Leaf, which is targeting an IPO later this year, also generated a 60% uplift compared to SEEDs original investment following a recent fundraise.
As of the end of the reporting period, SEED’s current cash position was around £2.5m.
“While we have seen many investors in our space change strategies, this is not the case with SEED,” Non-Executive Chairman Ian Burns said.
“Quite the contrary, we remain steadfast in our goal to work with outstanding entrepreneurs and build world-class businesses that create material value for our shareholders. Our deal flow remains robust, and we are optimistic that the current environment will offer superior opportunities to deploy our cash reserves and in turn, create long-lasting value for our investors.”
SynBiotic
German cannabis group SynBiotic SE has seen its stock jump by nearly 20% last week, breaking a period of stagnation which has lasted since May.
It came as the company announced the conclusion of an agreement with one of its loan creditors.
As part of the agreement, the creditors claim of around €912,000 will be contributed to the company as part of a non-cash capital increase against the granting of 227,900 shares.
SynBiotic’s share capital will therefore be increased from €4,677,397 to €4,905,279 by issuing the 227,900 ‘new no-par value registered shares a proportionate amount of the share capital of EUR 1.00 per share at an issue price of EUR 4.00 per share.’
In November 2022, SynBiotic revealed that Canopy Growth’s Founder and former Chairman and CEO Bruce Linton has joined its team.
Mr Linton has been appointed to head up SynBiotic’s newly created advisory board, and is understood to have invested his own capital in the company’s recent financing round, acquiring around a 5% stake in the business.
