No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Packaged-goods distribution business Chill Brands said on Monday that it has experienced strong recent trading momentum at its Chill Connect distribution platform alongside a materially leaner cost base following last year's restructuring.
Chill Brands said productsales revenue at Chill Connect grew at an average rate of more than 55% monthonmonth between October and January, with combined product and servicefee income topping 150,000 in January alone.
Revenues for the fourmonth period were said to be close to the total generated across the prior 18month reporting period, with overall income now exceeding that earlier total.
Chill Brands said demand for its directtoconvenience model continued to run ahead of capacity, with growth constrained primarily by workingcapital availability rather than market appetite. It also said it will expand its product range beyond vaping and nicotine into sundries, beverages and confectionery as part of an effort to increase average order values and broaden its role within the convenience channel.
The AIM-listed group also noted that following its exit from its legacy US operations and the resolution of historical legal matters, more than 800,000 of exceptional costs and over 500,000 of operational expenses had been removed from the business.
Chief executive Callum Sommerton said: "The company's operational performance validates everything we've built with Chill Connect so far. Significant month-on-month revenue growth resulting in increasing monthly revenues since the beginning of the current financial year demonstrate that our model works and that market demand is substantial.
"It is particularly encouraging that demand continues to run ahead of supply and the opportunity ahead is clear. We have retailers asking for more product lines and brands seeking our distribution reach. The market opportunity in convenience retail is only growing larger, and we are determined to take it."
As of 0900 GMT, Chill Brands shares had shot up 33.33% to 0.60p.
Reporting by Iain Gilbert at Sharecast.com
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.