Nutritional Holdings yesterday returned to profitability, reporting a profit of R5.94 million for the year to end February from a R5.40m loss last year.
The group said its earnings per share and headline earnings per share improved 183 percent to 0.04 cents respectively on the strategic plan by the management, which boosted its earnings.
The group wants to acquire the cannabis group Ukusekela Holdings after an interim management agreement between the companies raised its earnings during the period.
“The proposed acquisition which led to the signing of the interim management agreement has borne fruit and bodes well for future quarter-on-quarter growth and expected positive cash flows. The global trend for cannabis sector companies has achieved triple digit growth and this achievement further illustrates that the company is on track to mirror its global counterparts in delivering impressive profits in both the short and medium term,” the group said.
However, the group added the largest factor in the turnaround of its fortunes was exponential demand and resultant growth in the sale of cannabis associated products, The Ultimate Immune Booster with Cannabis Extract.
It said based on estimation, the industrial, medical and recreational potential of the cannabis plant is worth between $150billion and $250bn.
The group said it has developed a formula for medical cannabis edibles through its Nutritional Foods factory that will infuse cannabis extract with instant meals for use by cancer or terminally ill patients.
The group also credited its restructuring actions during the period, with its revenue increasing 7.80percent to R40.83m and net asset value per share 67.18percent to 2.19c.
“We have substantially reduced our expenses and cash burn. Our marketing and research and development investments are being re-allocated to programmes with high-return potential in order to drive sales,” it said.
“We have already proven we can deliver three-digit gross margin and are confident that we can surpass that level as we work toward higher capacity and economies of scale across our facilities as demand for our cannabis products continue to grow.”
Nutritional Holdings shares closed unchanged at R0.01 on the JSE yesterday.