Love Hemp Group PLC (AQSE: LIFE) (OTCQB: WRHLF), the brand-led consumer goods company focussed on CBD health and wellness solutions, is pleased to announce its final results for year ended 30 June 2021 (“FY21” or the “Period”). A full copy of the results is available on the company website.
Financial Highlights
- Revenue of £4.33 million (FY20 £2.69 million unconsolidated and £1.69 million consolidated from date of acquisition)
- Gross profit of £1.25 million (FY20 £0.96 million from date of acquisition)
- Cash balance of £0.925 million following significant marketing investment aligned with corporate objective of establishing a strong brand led presence across multiple channels of retail, online and omni channels including wholesale distribution inclusive of £6.3 million pre-payments for marketing and licensing agreements
Operational Highlights
- Multiyear, category exclusive licensing agreement signed with the Ultimate Fighting Championship (“UFC”) with an additional opportunity to develop a “licensed range” of UFC CBD products
- Three-year endorsement agreement with Anthony Joshua OBE, two-time Heavyweight Champion of the World and Olympic gold medallist through which he became a shareholder of the Company
- High profile sponsorship and influencer agreement signed with Kamaru Usman, current UFC Welterweight Champion
- Announced intention to move to London Stock Exchange’s Main Market and process is progressing well
- Acquired new premises with capacity to manufacture up to 500,000 units of CBD products monthly
- Increased orders from Boots and Holland & Barrett in October 2020, along with an increase in orders from the Company’s online platform
Post-Period End Highlights
- Launch of virtual Love Hemp Amazon store on www.amazon.co.uk
- Establishment of international distribution partnerships ahead of launch in new territories including eCargo in Asia
- New Manchester office opened focused on marketing and new product development
- Launch of first national media campaign (the “Campaign”) starring Anthony Joshua OBE across TV, print and outdoor advertising in November 2021
- Campaign has already resulted in a significant number of new customers and increased revenue from returning customers buying direct from lovehemp.com as well as increased orders from major retailers
- 35% of orders in November 2021 were from new customers
- Revenue from major retailers including Boots and Holland & Barrett increased 65% in November 2021 compared to the average monthly revenue from retailers in the previous 10 months
- A week of Black Friday promotions in late November 2021 increased monthly revenue by 150% and 228% on September 2021 and October 2021 revenue respectively
- Early access to Black Friday promotions for existing customers resulted in 65% of November orders from returning customers
Commenting on the results, Tony Calamita, CEO said: “Love Hemp Group has undergone major changes during the Period. Embedding a new team, aligning the business with its new regulatory reporting obligations, and establishing appropriate corporate governance measures has been our priority for the Company’s corporate maturation and planned move to the Main Market of the London Stock Exchange. These corporate changes have been alongside delivering growth in revenue, attracting new customers, developing new retail relationships and securing partnerships with leading organisations and individuals. A huge amount has been achieved to date and important preparations have been made for the Company’s growth trajectory.
“This next phase is focused on building brand visibility and loyalty and creating a distinctive position for Love Hemp in the burgeoning CBD wellness sector. Investment in brand building commenced in November 2021 with the launch of our first national media campaign with our investor and ambassador Anthony Joshua. This campaign was the first step in leveraging our outstanding partnerships which, coupled with impactful marketing, is a crucial part of our growth strategy. Positioning outdoor adverts near our key retail outlets has already resulted in significant orders from both Boots and Holland & Barrett. We have also attracted new customers to lovehemp.com in November with 35% of November orders coming from first time buyers.
“In addition to building the brand, visibility it is crucial for us to grow the value of the brand. We have moved away from regular discounting and will be implementing new marketing initiatives in the New Year to drive value. We have already seen the positive impact of this change in our Black Friday sale which ran for one week rather than the whole of November as per previous years. Revenue from lovehemp.comincreased 12.6% in November compared to average revenue of the previous 10 months, and this uplift was achieved while moving away from discount led promotions other than the Black Friday week.
“Key to the momentum of brand building is understanding our consumers. Our revised marketing strategy will see us pivot towards a focus on the consumer use cases of sleep, stress, anxiety, recovery, and pain. Investment in data driven marketing will enable us to better understand who our consumers are and their purchasing behaviour, which will in turn improve targeting and grow our market share amongst key audiences. Enabled by our data driven decisions, the New Year will also see the launch of multiple new products. These new products target new audiences and new distribution channels. These new products have all been developed by our in-house New Product Development team in our new premises in Manchester.
“A focus on consumer use cases, investment in brand building through partnerships, data driven digital marketing and new product development help deliver a robust, distinctive and informed offering. We believe this is unique in the CBD wellness space and that these developments, in addition to the strong revenue, growing customer base and established sales channels, provide Love Hemp with a platform from which to become a globally recognised and trusted brand.
“In what has been a challenging phase in the Company’s development we look forward to entering the New Year with refreshed purpose and delivering strong results throughout the remainder of the current financial year.”
