Proactive Investors - CBD product developer and distributor Chill Brands Group PLC’s turbulent financial year was on full display in the company’s interim report for the period ending September 30.
Incoming chief executive Callum Sommerton engaged in restructuring efforts to shore up working capital by raising £3.7mln through the issue of new shares to existing shareholders, all the while acting to drastically cut costs, primarily marketing and advisory fees.
Cost-cutting measures led to an annual saving of at least US$1mln (£830,0000) from the discontinuation of certain prior activities.
Quoted revenues for the period of £19,600 (compared to over £1mln in the same period for 2021) were skewed by the fact that Chill Brands Group sold its entire inventory of key product lines to master distributor Ox Distributing prior to the period.
Chill Brands received new CBD pouch products in October, sales of which are now generating recordable revenues. All future deliveries of new inventory will be owned by Chill Brands and will therefore provide a clearer path to recordable revenues.
The company recorded an operating loss of £2.2mln for the period.
Chief executive Callum Sommerton commented: "Much has changed at Chill Brands during the six months ending 30 September. During this transitionary period, we have taken steps to stabilise and improve the company's business model while reducing costs. We have also acted to correct past arrangements that have complicated the company's path to revenue.
“In the months since we have relaunched the Chill brand and commenced negotiations with external partners as we seek to build a wider product marketplace on the Chill.com domain.
“We are now preparing for the launch of our new nicotine-free vapour products and expect them to make a significant contribution to Chill Brands' revenue generation prospects during 2023."