Melodiol Global Health’s wholly-owned Australian Subsidiary Health House (HHI) has demonstrated it’s heading in the right direction for the half ended 30 June 2023.

Melodiol Global Health (ASX:ME1) closed the acquisition of HHI, an international pharmaceutical distributor, specialising in the distribution of medicinal cannabis products in Australia and medical products in the UK, in May 2023.

HHI’s operating units  generated  combined  currency-adjusted  unaudited  revenues  of  $11.04 million from January through to June 2023, with an adjusted EBITDA margin of 7.4%.

ME1 said HHI’s unaudited  revenue during H1 CY2023  highlights a 36% increase on the previous corresponding period (PCP) of $8.11 million.

ME1 said the results further reiterate the company’s strategy that the acquisition and integration of HHI significantly increases the scale of ME1’s business.

Focus on driving sales

ME1 had been assisting HHI’s management drive sales growth and operating efficiencies for several months prior to the acquisition.

For the half year ended 30 June  2023, HHI generated combined currency-adjusted unaudited revenues of $11.04 million with an unaudited adjusted EBITDA margin in operating units for the period of 7.4%, an increase of  36%  on  PCP.

HHI  unaudited revenue  of $2.74 million  generated  from  15 May 2023  (being the date of acquisition) to 30 June 2023 will be recognisable by ME1 on consolidation into the company’s half year report to 30 June 2023.

Optimistic about cash flow breakeven

ME1 said recent results from both HHI and its other wholly-owned Canadian subsidiary Mernova provides considerable validation of its strategy to grow revenue with a strategic focus on cost management at the business group level to achieve cash flow breakeven.

Mernova, a leading supplier of recreational cannabis products in the Canadian market, delivered a 42% increase in sales on PCP to round-out record half-year CY2023 sales of $3.095 million.

ME1 said it is  confident of continuing  the growth trajectory across other business units in coming quarters.

CEO William Lay said HHI has been a very strong contributor since it joined the Melodiol group of companies.

“We are extremely pleased to witness the success of the various divisions at Health House as they deliver material revenues and adjusted EBITDA for the group,” Lay said.

“The board and management team is highly optimistic about growth prospects for the entire Melodiol business over the coming quarters.”

This article was developed in collaboration with Melodiol,  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.