Fiji Kava Half Year Results
Brisbane, Feb 28, 2022 AEST (ABN Newswire) - Fiji Kava Ltd (
ASX:FIJ), is a health and wellness company with operations in Australia, Fiji, and the USA. The company which produces natural products to reduce anxiety, promote relaxation, improve sleep, and support sports recovery and performance, submits the following Appendix 4D Preliminary Report for the six months to 31 December 2021 (H1FY22).
KEY HIGHLIGHTS
- Record half year revenue result with $926,876 achieved in H1FY22, an increase of 87% versus the prior corresponding period (H1FY21: $496k)
- Statutory Net Loss of $2,623k increased by 62% from the prior corresponding period (H1FY21: $1618k)
- Significant activities to drive revenue growth have been undertaken including marketing investments of more than $905k, inventory build up to $936k and facility upgrade investments of over 200k FJD.
- Commenced importation of Drinking Kava products under the new Australian Pilot Program
- First orders shipped to two new customer channels, Cross Border eCommerce in China and Speciality Health Food Retail in Australia.
- Commenced The Calmer Co USA operations in November, including the appointment of our USA Managing Director, Brian Casutto, and the USA Board of Directors.
- Appointment of IMCD Network Nutrition as exclusive ingredient marketing partner in the USA.
Fiji Kava CEO, Dr Anthony Noble said: "FijiKava began the financial year with a focus on enhancing production efficiency and strengthening our supply chain for Noble Kava Extract production in Fiji. We continue to build inventory of Noble Kava Extract to support the production of our complementary medicine products. Having established a strong relationship with IMCD Network Nutrition and network of CMO clients around the world, we have built a solid base of ingredient sales."
"We have continued to see month to month growth in the sales of our branded FijiKava products in Australia through both Coles and Chemist Warehouse and have added Unique Health Products as a distributor to the speciality health food retail channel, supported through our trade promotion and point of sale activities with our retailer partners and our national brand campaign. Momentum in the ingredient and retailer sales channels continues into 2022 and has provided a solid base from which company can continue to accelerate growth."
"The FijiKava team optimised a number of key functions around eCommerce early in the financial year. We rebuilt our Australian website, reformed our Amazon online strategy and are nearing completion on the build of our US website. The strongest growing segment of our sales is now these eCommerce (direct to consumer / "DTC'') channels, particularly in the USA. More recently Australian DTC is showing strong growth since Drinking Kava products have become available. DTC are our highest margin channels globally."
"Our blended margins on product sales across the three sales channels (ingredients, retailers and direct to consumers) have reduced in the current half year, due to some one-off inventory write off and adverse impact of foreign exchange changes over the period. Freight costs have also been very high in this period. Our focus moving forward will be on achieving improvements in cost of goods, through factory upgrades and increased utilisation in Fiji as well as larger batch production sizes. It is expected that we will see a shift to a higher proportion of DTC sales and improving margins in future quarters as we fully utilise the digital assets and retailer relationships that we have built over 2021"
Sales in Australia have dominated our mix in H1 and will shift strongly to the USA in H2 following the establishment of our own organisation in The Calmer Co. USA and the acquisition of Danodan.
Sales of ingredients represented more than half of our revenues in H1. Moving forward sales to retailer partners and especially Direct to Consumer will grow more strongly as eCommerce and retailer relationships evolve.
Sales of Extracts outstripped sales of finished products and will shift toward finished products as drinking kava in Australia and USA sales for Danodan and Fiji Kava increase in H2.
STRATEGIC HIGHLIGHTS
Fiji Kava's strategic vision is underpinned by four key pillars. The Company continues to progress its strategy across each pillar, with the below a summary of key highlights achieved during the quarter.
1. Growing Availability of Fijian Noble Kava
- Appointment of IMCD Network Nutrition as exclusive marketing partner in the USA for branded ingredients in deal including $3m in minimum sales over 3 years
- Two new distribution channels taking first orders, being the cross-border eCommerce market in China and speciality retail distribution in Australia
2. Noble Kava Supply Chain Excellence
- FijiKava continues to build its finished goods inventory and work in progress to support demand growth and manage increasing global supply and logistics risks
- FijiKava has invested $130k in new equipment for the Levuka Processing Facility that will improve capacity by approximately 50%, with the upgrade to be completed by April 2022.
3. Innovation & Product Development
- Development has been completed for three new Kava Teas which have now shipped to the USA Market to be launched via Amazon - Noble Kava(R) Calm Tea, Noble Kava(R) Sleep Tea and Noble Kava(R) Wellness tea.
- Development has been completed for Noble FocusTM - a synergistic combination formulated to support calm concentration and academic performance in adults experiencing symptoms including inattention and hyperactivity and TGA listing is completed.
4. Promoting the Medical Benefits of Noble Kava
- Targeted digital out of home advertising across delivered to 911 screens across 69 retail locations, all with Coles and Chemist Warehouse proximity, has delivered a Unique Reach of 2.19m viewers since October
- Digital advertising footprint of the "Calm your Karen" campaign has yielded 12.5m impressions and organic social media engagement has dramatically increased with monthly impressions over 4 million on Facebook and Instagram
- Online eCommerce traffic to Fijikava.com is now in the top 2% of comparable online stores with 24,203 website visitors since launching the new site on 26 October 2022
*To view tables and figures, please visit:
https://abnnewswire.net/lnk/D0MZ63SZ
About Fiji Kava Limited
Fiji Kava Limited (ASX: FIJ) is an Australian-Fijian medicinal kava health & wellness company, producing natural 'noble kava' products for the complementary and alternative medicine market, estimated to exceed USD $210 billion by 2026 globally. As the first foreign company with approval from the Fijian Government to operate in the kava industry, FijiKava has established a global leading sustainable and 100% traceable, certified organic supply chain of 'noble kava' including a nucleus farm in Levuka, on the island of Ovalau, Fiji.
FijiKava is focused on expanding the availability of noble kava products throughout western markets to provide a natural alternative to prescription medicines to promote sleep, soothe and calm the nerves, support muscle relaxation and relax the mind.
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