BOD Australia Ltd - Quarterly Activities Report: Growth continues with commercialisation of CBD products
BOD Australia Ltd (ASX:BDA)

Quarterly Activities Report: Growth continues with commercialisation of CBD products

Highlights

What's happened?

BOD Australia Limited (ASX: BDA, ‘Bod Australia’) released their quarterly activities and cashflow report for Q2 FY2019/2020.

What are the highlights?

BOD Australia confirmed sales for Q2 FY 2019/2020 of $536,000, which is slightly higher than Q1 FY2019/20 which stood at $507,000. $832,799 in binding purchase orders have also been received and will be invoiced and delivered in the March 2020 quarter. Furthermore, 1,842 MediCabilis™ prescriptions were made during H1 FY 2019/2020 with 799 prescriptions in Q2 FY 2020. MediCabilis™ is now being prescribed to treat 17 different conditions.

Outlook

BOD Austraila are expecting:

  1. The introduction of new products and brands in collaboration with H&H in Australia and internationally;
  2. Further growth in MediCabilis™ prescription sales domestically and internationally;
  3. The pursuit of collaborations with key research groups to advance research into specific application for CBD, based on the use of MediCabilis™; and,
  4. The supply of MediCabilis™ products for trial stock for different medical conditions.

What does this announcement mean?

Erik Bergseng CFA® from Mawson Graham provides perspective on this recent announcement.
Erik Bergseng CFA®
Written by Erik Bergseng CFA®
Published Jan 28, 2020

The company have announced an increase of 5.7% in sales from Q1 to Q2 FY19/20 as well as a $832k binding purchase which points to continued top line growth. MediCabilis™ prescriptions appear to have slowed from 1043 in Q1 vs 799 in Q2 (1842 in H1 FY2019/2020 = 1043 in Q1 + 799 in Q2).

BOD Australia have spent ~A$1.4m in product manufacturing and operating costs over the past 6 months, ~A$940k of which has occurred in the December 2019 quarter, which suggests the company is preparing for continued sales growth. The company also remains well capitalised by retaining a strong cash balance of A$8.1m in cash as of 31st December 2019.

Overall we believe that BOD Australia is well placed to continue growing sales through a combination of channels. This includes launching new products into additional territories through its H&H partnership which has been flagged by management to occur this quarter. We think BOD Australia is likely to continue unlocking additional territories from this partnership as they have been able to recently demonstrate a successful launch into the U.K. market. The introduction of additional prescription products have also been flagged by the company and are expected to progress in the coming months.

The information within this section has been provided by Mawson Graham Pty Ltd and is for general information purposes only and is not intended to reflect any recommendations or financial advice. The information in this section has been prepared without taking into account your objectives, financial situation or needs. For this reason, you should consider the appropriateness of the advice or recommendation in light of your own personal circumstances, relevant risk factors, the nature and extent of your risk of loss, as well as the legal and accounting consequences before acting making an investment or trading decision regarding any Financial Product mentioned herein. While it is believed that all information sourced and contained within this section to be accurate at the time of publication, liability for any errors, omissions, accuracy or completeness of the information (except any statutory liability which cannot be excluded) is specifically excluded by Mawson Graham Pty Ltd, its associates, officers, directors, employees and agents. Past performance is not a reliable indicator of future performance. Important Disclosure: Mawson Graham Pty Ltd, its directors, associates and employees advise that they may hold securities, may have an interest in and/or earn brokerage, investor relations fees, corporate fees, and other benefits or advantages, either directly or indirectly from client transactions arising from any information mentioned within this section and in documents published within this section.
Mawson Graham
Mawson Graham

CEO's Summary

Jo Patterson

"Q2 FY2020 has been a period of growth and commercialisation for Bod. The Company has continued its momentum throughout the quarter, showing major progress on numerous fronts. The launch of our CBD products under the CBII brand in the United Kingdom is a significant milestone and represents the first execution of the Company’s strategic agreement with H&H Group. Bod is fully engaged with H&H Group on a number of growth initiatives and will launch new products with them this quarter. Bod will continue to develop and commercialise its cannabis products and progress additional market entries as soon as possible. We are confident that MediCabilis™ prescription sales will continue at a higher rate in Australia and some international markets. The Board and management look forward to providing additional updates on progress in the near term."

Jo Patterson
CEO, BOD Australia Ltd

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