Althea Group Holdings Ltd (ASX: AGH) shares are soaring higher today following the company’s release of its quarterly update. At the time of writing, the Althea share price is trading 8% higher at 54 cents.
Let’s take a look and see how Althea performed for the September quarter.
What’s driving the Althea share price higher?
The Althea share price is marching higher today after the company delivered a strong result for the period ending 30 September, despite COVID-19 restrictions remaining in place.
Althea highlighted an increase in total group revenue of $2.1 million, up 32% on the prior quarter. The record amount was achieved by the launch of Althea’s online platform for medical cannabis products in Australia. In addition, its United Kingdom segment grew by 104% on a month-by-month basis, to record more than $75,000 in revenue.
Cash receipts for the three months came to $2 million, representing a 36% increase from the June period. Althea advised it expects to break-even within the March 2021 quarter.
The company also revealed it added 943 patients in Australia, a 27% jump, bringing the total number of patients to 9,683. The number of healthcare professionals that have prescribed Althea’s cannabis products rose to 696, up 18% on the June period.
The company’s subsidiary, Peak Processing Solutions, continued to reach company milestones during the reporting period. Customers have committed to sales worth over $650,000 following the grant of its health licence.
Althea disclosed it holds a cash position of $6.98 million and is in a good position to accomplish its growth strategies.
Management commentary
Althea CEO, Josh Fegan, commenting on the robust performance, said:
The September quarter has been an important period for the Company, as we have continued strong quarter on quarter growth, with a 32% increase in revenues from the previous reporting period. With Peak Processing Solutions having received its Standard Processing License from Health Canada last month and already entering into commercial agreements with customers, our shareholders can continue to expect strong revenue growth for the December 2020 quarter.
Our patient numbers have also continued to experience a strong increase in Australia and with revenue more than doubling in the UK in September, we anticipate companywide break-even within the March 2021 quarter.
Should you invest?
The Althea share price has been on the rise over the last three months, outstripping the All Ordinaries Index (ASX: XAO) by over 40%. Of course past performance is no guarantee of future performance and, personally, I’m inclined to sit on the side lines with today’s Althea share price.
I think that, while the company shows potential for growth, the medical cannabis industry is too volatile for me. In light of this, I prefer to look elsewhere to grow my wealth in what I believe are safer and more stable sectors.
These 3 stocks could be the next big movers in 2020
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.*
In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
Find out the names of our 3 Post COVID Stocks – For FREE!
*Returns as of 6/8/2020
More reading
Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post Why is the Althea (ASX:AGH) share price up 8% today? appeared first on Motley Fool Australia.
from Motley Fool Australia https://ift.tt/34YvKNp
Leave a Reply