Share price skyrockets after Hemp news

SHARES in Geelong company Australian Primary Hemp soared more than 50 per cent last week on the back of two major announcements.

After a major distribution deal with Woolworths, the company also announced a $5.2m capital raising.

Proceeds of a share placement for which it has firm commitments from investors will enable Australia Primary Hemp to accelerate its transformation from an ingredient producer to a branded value-added health and wellness company.

From March, its Mt Elephant range of plant-based baking products will be available in Woolworths stores around the country, with the company forecasting yearly sales of $2.31m.

Another deal with 7-Eleven announced in November is expected to generate annual sales of Mt Elephant seed and nut bars of between $1m and $1.4m.

Following the announcement, the company’s share price ended the week more than 50 per cent higher to hit the 50c mark, a generous premium for investors taking part in the placement under which shares will be issued at 32c.

The developments continue a turnaround at the company, which introduced new management and a revised business strategy last year after its shares were valued at less than 1c in April.

Chief executive Neale Joseph said the support investors had shown Australia Primary Hemp was encouraging.

“There are significant tailwinds and growing consumer demand for high-quality plant-based ‘superfoods’, particularly hemp-based products,” Mr Joseph said.

Australian Primary Hemp engages in every step of its supply chain, from seed selection and farming to manufacture and distribution of its products at its Newtown factory.

The capital rise will fund new equipment and upgrade its hemp dehuller, strengthening the balance sheet, marketing and sales costs and general working capital.