Which ASX cannabis share is surging 27% on record quarterly results?

ASX cannabis share Althea Group Holdings Ltd (ASX: AGH) leapt by as much as 27% this morning after the company revealed record quarterly sales of $9.24 million.

The company also achieved its maiden monthly operating profit in March, and now expects its first quarter of profit in June.

Althea manufactures, sells, and distributes cannabis-based medicines and recreational products globally.

Shares in Althea are currently changing hands for 5.1 cents, 13.3% up on yesterday’s close of 4.5 cents.

In earlier trading, they hit an intraday high of 5.7 cents, up 26.6%.

Let’s look at the detail in the report.

Althea share price soars on 68% increase in sales

The company reported the following results for the three months to 31 March:

• $9.24 million in cash receipts, up 68% on the prior corresponding period (pcp)
• Net cash outflows of $1.63 million, down 24% pcp
• Cash and cash equivalents of $5.3 million as of 31 March

What happened to this ASX cannabis share in March?

Althea has two business divisions — recreational cannabis and pharmaceutical cannabis.

The company reported a record $5.15 million in receipts for recreational cannabis during the March quarter, up 57% compared to the December 2022 quarter.

It also reported a record $3.75 million in receipts for medicinal cannabis, up 11% on December.

Althea recorded its maiden monthly operating profit in the month of March.

The ASX cannabis share is flying today on this news and may get a further boost if the company makes good on its expectations of a maiden quarterly profit in June.

Althea also said operating expenses fell during the March quarter as a result of cost-cutting programs.

In other news during the quarter, Althea announced it had secured a CAD$2 million loan facility from lenders in Canada.

In addition, the company announced a further $2.2 million of convertible debt funding. This was provided by an institutional investor in the United States.

The ASX cannabis share fell by 16.7% between 1 January and 31 March.

The S&P/ASX All Ordinaries Index (ASX: XAO) rose by 2.1% over the same time frame.

‘A landmark turning point’ says CEO

Althea CEO Joshua Fegan said:

March 2023 was a landmark turning point for the Company as we achieved record monthly cash receipts and a maiden monthly operating profit.

To close out the Quarter with such a strong month (March) sets us up well for an expected substantial improvement in cash flow position, and a quarterly operating profit, for the final quarter of FY23.

The post Which ASX cannabis share is surging 27% on record quarterly results? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in Althea Group. 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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