Key points:
- Chill Brands shares were unmoved despite releasing its full-year results.
- The CBD firm encountered multiple challenges in the year to March 2022.
- The firm is currently working to transform its business. Will it succeed?
The Chill Brands Group PLC (LON: CHLL) share price remained unmoved after the company released its final financial year ending 31 March 2022. However, the company noted some difficulties during the period under review, including some regulatory hitches.
The CBD company lowered its final revenue figure to £624,187 from the £1 million reported in its interim results. The firm attributed the lower revenues to a promissory note from Ox Distributing, a related party, based on projected supplies to stores that fell through.
Also read: 12 Best Shares To Buy As A Beginner.
Chill Brands underwent significant changes up to now, including terminating the contract with Ox Distributing,w which was its leading US distributor, since the terms of the agreement were quite unfavourable.
The company also acquired the Chill.com domain for a whopping $1.6 million, leaving many wondering whether any domain was worth that much. However, the CBD company reiterated its confidence in the purchase, saying that similar domains have sold for much more.
Chill Brands also wrote off debts worth £9,299,301 advanced to its US operating subsidiaries, given that the company primarily raises money in the United Kingdom but then transfers the monies from its UK account to its US subsidiaries’ accounts, where it records them as loans/advances. The firm does not expect its subsidiaries to repay the loans.
Chill Brands had to abandon its tobacco-free nicotine pouches in March 2022, shortly after its debut in December 2021, after a new law passed by the US Congress brought them under the purview of the US Food and Drug Administration (FDA).
The CBD firm also sponsored the US Major Arena Soccer League (MASL), bringing significant visibility to its products, which will likely lead to more sales in future. In addition, the company also sponsored the Connecticut Whale – a famous hockey team, as part of its sports sponsorships.
Chill Brands has shifted its marketing strategy to one focused on delivering its products closer to its target stores, which should work better since it gives the firm more control over the marketing of its products, including providing quick sales and marketing support.
The CBD company remains promising, and I will be interested to see how its current plans unfold.
*This is not investment advice.
Chill Brands share price.
Chill Brands shares were unmoved after the CBD company released its full-year results.