ASX Earnings Wrap: Ecofibre surges 50pc on record quarter; Novatti capitalises on megatrend

It’s earnings season again as the ASX market announcements page becomes increasingly flooded with earnings lodgements.

To save you the trouble of trudging through it all, we’ve wrapped up the highlights from some of the reports that caught our eye.

Ecofibre (ASX:EOF)

Highlights:

Revenue $7.8m, up 7% pcp and down 5% on the prior quarter
Hemp Black range delivered another record sales quarter
Cash $7.3m as of 30 June, in line with prior quarter

Hemp-focused Ecofibre rose 50% this morning after providing a June quarter update.

During the quarter, revenues include record sales for Hemp Black, higher sales in Ananda Health, and lower sales in Ananda Food due to $1.3m in sales credits issued to fibre seed customers for goods damaged in transit from Australia to the US.

Overall, second half revenue is expected to be 25% higher than first half, and growth is expected to continue into FY24.

This will be supported by the separately announced agreements with Under Armour and Cruz Foam – two companies which are expected to underpin profitability for Hemp Black in FY24.

“The outstanding technical capabilities of the team enable us to work with tier-1 clients on large-scale opportunities,” said Ecofibre CEO, Eric Wang.

Novatti (ASX:NOV)

Highlights:

$10.3m in Q4 sales revenue, up from $8.9m in previous quarter
Processing volumes up 15% quarter-on-quarter to $1.19 billion
Gross margin at 51%, up from 35% in pcp

The payments tech company rose 8% as it continues to capitalise on the global mega trend towards digital commerce, which is being reflected in Novatti’s payment processing volumes.

These volumes were up 15% quarter-on-quarter to $1.19 billion in Q4 FY23.

During the quarter, Novatti began to streamline the business with a focus on profitable revenue where enhancing gross margin is a key focus.

The company expects these cost optimisation measures to continue through FY24.

Also in June, Mark Healy commenced in the role of CEO having been promoted from the role of executive general manager of Payments.

Knosys (ASX:KNO)

Highlights:

Total FY23 cash receipts up 13% on pcp
ARR of $9.5m at July 2023, up 1% year-on-year and steady quarter-on-quarter
Outlook includes targeting cashflow and EBITDA breakeven

The employee productivity tech company rose 8% as it reported $1.4m in cash receipts from customers and a $0.8m R&D rebate for the quarter.

In Q4, Knosys refined its business strategy to meet the changing market conditions by continuing to reduce operational costs and prioritising product development and customer acquisition.

This refocused growth strategy is expected to result in an estimated $1m reduction in future annual operating costs, achieved primarily through a reduction in head count.

Knosys says this will position the company to pursue its objective of operating at breakeven EBITDA or better.

Lark Distilling (ASX:LRK)

Highlights:

Q4 net sales revenue was $4m, in line with the pcp
Signature and Symphony product revenues grew by by 49% and 42% in Q4 vs pcp
Cash balance of $7.2 million at 30 June, with $15 million undrawn bank facility available

Lark says the underlying organic performance of its core Signature and Symphony product ranges continued to perform strongly in Q4, supported by both domestic and export sales.

Whisky under maturation at 30 June increased to 2.38 million litres.

In addition, Lark’s reputation for quality and craftsmanship were further strengthened after receiving 11 awards at the International Wine & Spirits Awards in London.

During Q4, Lark undertook cost cutting actions, including some internal reorganisation that were deemed necessary to better position the company to deliver long term growth.

Sezzle (ASX:SZL)

Highlights:

Total income grew to US$11.8 million in the month of June, up 20.7% on YoY
Total Income as a percentage of Underlying Merchant Sales increased YoY to 9.1%
As of June 30, abundant liquidity with US$63.4 million of cash on hand

The BNPL company says the June launch of Sezzle Anywhere has been particularly exciting, driving its total subscriber base (Premium and Anywhere) to over 187,000.

In June, Sezzle recorded GAAP Net Income of US$1.2 million, resulting in GAAP Net Income of US$1.1 million for the quarter and representing the fourth straight quarter of GAAP Net Income for the company.

Another notable item in the quarter was the Sezzle Canada business, which recently surpassed the milestone of 500,000 users, reaching the mark in just four years.

With regards to Nasdaq listing, Sezzle is currently waiting for final approval.

Mighty Craft (ASX:MCL)

Highlights:

Unaudited group revenue of $21.5 1 million, down -7% versus pcp
Cash receipts of $26.5 million, down -2% versus pcp
Better Beer sales of 10.4 million litres for FY23, a 138% growth vs pcp

The brewer says growth across the second half was impacted by a softening in the overall market as cost-of-living pressures and inflation continued to impact consumer spend.

Growth across craft beer and gin slowed and while overall spirits growth was steady, as there was an increasing shift in consumer preference observed to value-based brands.

Growth was strong in 78 degrees and Seven Seasons, while Kangaroo Island Spirits was cycling significant pipe fill in the previous year.

Better Beer meanwhile continues to perform exceptionally well selling over 10 million litres for the financial year, including 2.7 million litres in Q4 FY23.

The company has plans to significantly lower fixed costs and reduce debt levels, including $4.4 million of annualised cost already removed from the business in Q4.

Betmakers Tech (ASX:BET)

Highlights:

Q4 FY23 cash receipts from customers, up 5% on Q3
Operational cash outflows of $26.9m, down -6% on Q3
As of June 30th, cash balance was $41m

During the quarter, the wagering market tech company continued to focus on reducing and normalising the cost base and simplifying its operating model.

The focus of the last two quarters is evidenced in the declining operational cash outflows, and the company says it will continue to execute on its strategic restructure during Q1 FY24.

An investor webinar will be held following FY23 annual reporting in late August.