Lark share price soars on record quarter

Three gentleman in suits clink their glasses of whiskey together in celebration of the rebounding Lark share price today

Three gentleman in suits clink their glasses of whiskey together in celebration of the rebounding Lark share price today

The Lark Distilling Co Ltd (ASX: LRK) share price is having a strong day on Tuesday.

In morning trade, the distilling company’s shares are up over 5% to $2.85.

Lark Distilling share price higher on quarterly update

  • Record quarterly (unaudited) net sales of $6.8 million, up 72% on the prior corresponding period.
  • Achieved positive quarterly cash flow of $1.3 million
  • Strengthening whisky bank with 2.1 million litres of whisky under maturation
  • Balance sheet in a strong position with cash of $16.1 million

What happened during the quarter?

For the three months ended 30 June, Lark Distilling delivered a 72% increase in net sales to a record of $6.8 million. This reflects general improvements to the company’s operating environment and the return to on-premise sales following disturbances experienced in the March quarter.

This took the company’s FY 2022 unaudited net sales to a total of $20.3 million, which is an increase of 57% year on year and in line with guidance.

An even bigger positive was arguably the achievement of positive cash flow during the fourth quarter. Lark reported positive cash flow of $1.3 million for the three months thanks to improved debtor collection cycles and a decline in payments for product manufacturing and operating costs.

At the end of the period the company had 2.1 million litres of whisky under maturation. This is ahead of its previous target of 2 million litres.

The company notes that its whisky bank underpins future sales potential. And while the future potential net sales value of this liquid is variable, the sales price per litre observed within FY 2022 remains within its prior guidance range of +15% to +25% year on year from $216 per litre in FY 2021.

Management commentary

Lark’s managing director and interim CEO, Laura McBain, commented:

We are developing our core range to better meet the needs of customers in Australia. As we launch into export markets we’re also building and managing our whisky bank to ensure continued demand for Lark can be met with the highest quality product.

The launch of Dark Lark in May – as our winter release –achieved strong success and marks our biggest limited release to-date, demonstrating depth of innovation, outstanding marketing and brand execution within Lark.

McBain appears positive on the company’s outlook as it attempts to expand its reach. She said:

The next quarter is particularly exciting as we continue to introduce the Lark brand to new customers, offering targeted limited releases to Lark followers through a disciplined yet innovative approach to marketing. Equally, the Christmas period is always an active period for Lark and will see strong activity across retail, on-premise, e-commerce and our own hospitality venues.

Encouragingly, the enthusiasm of the broader team is clearly observed throughout these quarterly results, and we remain focussed on the momentum within the business.

The post Lark share price soars on record quarter appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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