A look at upward momentum of newly listed stock- ASX: EOF

EOF

Ecofibre Limited (ASX: EOF), established in 2009 and based in Queensland, is engaged in the production and commercialisation of hemp products in the United States and Australia. It offers a wide range of products including dehulled hemp seeds, protein powders, hemp oil, tinctures, and gel capsules.

Ecofibre debuted on the Australian Securities Exchange (ASX) on Thursday, March 29th, 2019, and got admitted to the official list of ASX. The company raised around A$ 20 million pursuant to the offer under its replacement prospectus dated February 22nd, 2019 by the issue of 20 million shares at A$ 1.00 each. The company’s current market capitalisation stands at AUD 711.5 million with ~ 309.35 million outstanding shares.

Today on April 10th, the EOF stock price shot up to Day’s High of AUD 2.640, closing at AUD 2.380, up by 3.5% with around 1.16 million shares traded. Besides, EOF has also generated a positive return of 49.35% over the last five days. Since its listing, the stock has soared by 35.3%.

Of late, the stock has been quite popular amongst the investors due to substantial changes in the shareholdings and also Directors’ initial interest.

  • Phillip Warner, Warnerpoo Pty Ltd and Sword Super Pty Ltd ATFT Sword Super Fund, all purchased a total of 53,109,243 fully paid ordinary shares (FPO), earning 17.17% stake in the company.
  • The Chairman Barry Martin Lambert purchased a total of 69,099,677 FPOs, representing 22.33% interest in the company, through the Lambert Superannuation Fund (31,400,223) and Lambert Family Trust (37,688,454).
  • Director Eric Wang directly purchased 8,644,158 FPOs, around 2,574,423 FPOs through the Ghengis Khan Super Fund and 1,710,000 through Meccaw Pty Ltd.
  • Director Jon Meadmore bought around 508,000 FPOs.

Ecofibre released its financial statement to the market for the half-year ended December 31st, 2018. The operating loss of the consolidated entity after income tax amounted to $ 0.4 million, which is lower than the loss of $ 2.3 million recorded in the prior corresponding period (PCP) ended December 31st, 2017. The net assets were valued at $ 10.7 million, up on $ 1.6 million as of June 30th, 2018.

Besides, the company’s net cash and cash equivalents stood at $ 5.93 million as of December 31st, 2018. The operating activities generated net cash inflows of around $ 393k due to large receipts from customers ($ 12.22 million) along with R&D tax rebates ($ 1.48 million). This was further supplemented by $ 4.94 million of cash inflows from financing activities, primarily the proceeds from the issue of shares. On the other hand, the investing activities comprising payments for property, plant and equipment resulted in $ 2.16 million of net cash outflows.

During the concerned period, the Ananda Health business continued to generate strong sales and is now profitably operating. The manufacturing facility in Kentucky was expanded and a new production facility was launched in Beresfield, New South Wales in September 2018 for the Ananda Food business. In the same month, Ecofibre introduced its own brand of hemp foods. Meanwhile, the Hemp Black business is in the commercial prototype phase.


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