Creso Pharma has recorded a total FY22 unaudited revenue and several key milestones on its path to becoming profitable “as soon as practically possible”.  

Aussie pot stock Creso Pharma (ASX:CPH) has released its FY22 results including unaudited revenue of ~$9 million , a record year and marking a 44% increase on FY2021.

Total group Q4 revenue was more than $2.57 million, a 25% increase on the previous quarter.

CPH attributed the rise in revenue to ongoing sales through purchased subsidiaries Mernova and Sierra Sage Herbs (SSH).

The company has been on an M&A trail expanding its global footprint in the medicinal and recreational cannabis sector.

Target acquisition company Health House International (ASX: HHI) generated $5.4 million in cash receipts for Q4, a 17% increase on the previous quarter. The increase was buoyed by a 22% rise in sales in its  Australian medical cannabis   distribution business.

HHI is an international pharmaceutical distributor, specialising in the sale and distribution of medicinal cannabis products across Australia and the UK.

CPH signed a scheme implementation deed for the acquisition of HHI in November 2022 with the deal expected to close in late Q1 or early Q2 FY23.

Reduction in cash burn, board, and management changes

There was also a 32% reduction in cash burn from operations from FY21 to FY22 and a 35% reduction between Q3 and Q4 FY22, which CPH said demonstrates management’s ability and core objective to simultaneously grow revenues and decrease costs.

CPH has made several board and management changes to reflect its ongoing commitment.

Appointments include SSH co-founder Jodi Scott becoming an executive director, ex-Canopy Growth executive Ben Quirin joining as a non-executive director and Peter Hatfull as a non-executive director.

During Q4 Boaz Wachtel also assumed the role of Non-Executive Chairman. CPH said each new director has extensive international experience and defined skillsets across business optimisation, strategic planning, government negotiations, corporate governance, and   product development.

On the path to profitability

CPH CEO and managing director William Lay said he’s proud of the entire Creso Pharma team to have delivered such strong results for FY22.

“Our core objective as a business is to achieve profitability as soon as practically possible and demonstrating a clear ability to grow revenues while simultaneously reducing costs is a strong vindication of the work we have done and the work we continue to focus on every day,” he said.

“We  enter  2023  with  a  diverse  platform of revenue generating  businesses  that  can  benefit  from  shared services and revenue synergies.

We completed the highly strategic acquisition of Sierra Sage Herbs LLC in the second half of 2022 and expect to complete the equally strategic acquisition of HHI in the first half of  2023.”

Lay said once all these  transactions  have  closed,  investors will see a Creso that is  materially larger in scale emerge in Q2/Q3 of FY23.

“We continue to monitor the M&A landscape for value accretive opportunities, while maintaining a sharp focus on driving growth in the business and reducing costs,” he said.

This article was developed in collaboration with Creso Pharma, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.