Little Green Pharma set to double revenue amidst European expansion

orecasts for Growth, Future Revenue, Net Profit, and Key Metrics

Forecasting LGP’s future performance involves assumptions based on FY2024 trends, market conditions, and strategic plans. Below are speculative projections for key metrics:

• Revenue Growth:
  • FY2024 Baseline: $25.6 million, up 29% from $19.9 million in FY2023.
  • Assumption: If LGP maintains a similar growth rate—supported by new products, European expansion (e.g., Germany’s legalization, France’s post-Pilot market), and innovation—revenue could grow by 25-30% annually.
  • Forecast:
    • FY2025: ~$32-$33 million (25-29% growth).
    • Factors: CherryCo’s momentum, new market sales (Poland, Switzerland), and potential US reclassification boosting global sentiment.
  • Risks: Increased competition or regulatory delays could moderate this to 15-20% growth (~$29-$31 million).
• Net Profit:
  • FY2024 Baseline: Loss after tax of $8.2 million, improved from $9.2 million in FY2023.
  • Assumption: Revenue growth, combined with cost control (operating expenses down 15% to $22.3 million in FY2024), could reduce losses. Profitability depends on scaling revenue faster than expenses and managing competition.
  • Forecast:
    • FY2025: Loss of ~$4-$6 million, assuming revenue hits $32-$33 million and expenses rise modestly.
    • Break-even: Possible by FY2026-FY2027 if revenue exceeds $40 million and margins improve (cash gross profit margin was 55% in FY2024).
  • Risks: Persistent losses if competition erodes margins or R&D costs spike.
• Operating Cash Flow:
  • FY2024 Baseline: Positive $66,791, a turnaround from negative $6.9 million.
  • Assumption: Continued sales growth and inventory efficiency (down 10% in FY2024) could strengthen cash flow.
  • Forecast:
    • FY2025: Positive $1-$2 million, assuming revenue growth and stable working capital ($15 million in FY2024).
  • Significance: Sustained positive cash flow signals financial health and reduces reliance on external funding.
• Other Key Metrics:
  • Net Tangible Assets (NTA): Declined from $76.6 million to $73.8 million (NTA per share: $0.264 to $0.246). Future growth could stabilize or increase NTA if losses narrow.
  • Borrowings: Reduced to $3.5 million from $11.7 million. Further reductions or refinancing (e.g., the $1.86 million loan extended to July 2025) could lower interest costs.
  • Market Position: LGP’s presence in 11 countries and extensive product range (23 branded products) position it to benefit from regulatory shifts (e.g., US Schedule III, Germany’s legalization).

Conclusion: LGP could see revenue of $32-$33 million in FY2025, with losses shrinking to $4-$6 million and positive cash flow of $1-$2 million. Profitability may emerge by FY2026-FY2027 if trends hold, though competition and capital market weakness pose risks.