LGP were close to break even with a negative cash flow of $397,000 last quarter.

Overall this was a sideways moving quarter for LGP with some positives and some negatives:

Positives

Receipts from customers was $8.2 million, up 19% on prior corresponding period. May a record revenue month of over $3.0 million. This is annualised to about $29 million (FY24 $25 million).

CherryCo sales up 19% on record prior quarter despite sales-driven stock outages in April.

LGP are investing into their new Smalls product range with outflows comprised of about $0.5 million in additional thirdparty inventory and SKU-related costs for the launch of new brands.

Capex expenditure down significantly to $20,000.

Staff costs were down $750,000 on prior quarter

Negatives

Receipts from customers was flat compared with the prior quarter.

Overall flower sales were down 8% on record prior quarter (This was offset by oil and vaporiser sales which were up 17% and 23% respectively). However management did not indicate why there was a fall in flower sales. I would speculate and say it could be competition, especially cheap imports effecting both price and volume of sales. Another possibility is they were supply limited as has been the case with their new popular CherryCo brand. It is also possible that overall flower sales declined in Australia last quarter. If their flower sales in Australia are being competed away then LGP have very little control over their market share and this business would be uninvestable.