Calmer Co (ASX:CCO) calls cheers on Kava power-up after investors fill the cap

Calmer Co (ASX:CCO) calls cheers on Kava power-up after investors fill the cap

June 28, 2024 Off By Jack Baker

The Calmer Co’s renounceable rights issue has closed heavily oversubscribed, raising about $2 million for scaling up operations amid continually improving Kava product sales from its Brisbane headquarters.

Eligible shareholders’ uptake of entitlements was over 80 per cent as CCO passed its cap around, with all the company’s directors taking up their maximum entitlements.

The demand has led the wellness-beverage company to go on with a follow-on $880,000 placement to take in excess demand, including another $225k director subscription, subject to a shareholder sign-off.

It leaves CCO with the funds in place to upgrade its Navua processing facility in Fiji, building up an already well-stocked inventory and making marketing investments to build its presence across Australia and the US.

The Calmer Co Managing Director Anthony Noble thanked the company’s shareholders for their support shown throughout the rights issue.

“Demonstrating their continued commitment to the company and enthusiasm for our future as we embark on an exciting new year that will build on the exceptional growth story over FY24, that has been driven by our ecommerce strategy and profitable complementary retail sales,” he said.

“This fundraising will importantly allow us to upgrade our facility in Navua to increase production capacity to over 20MT of green kava processing per week which will contribute to both scaling and margin improvement.

“The company continues to be committed to rigorous cost control and remaining focused on the highest margin, most scalable channels as we drive towards our breakeven target and then further.”

Ecommerce sales recently leapt up by 45 per cent over a month to $495k, returning of a daily average of $16k to the accounts, with over-the-counter sales at Coles Australia taking the May revenue total to over $610k.

Kava has been used as a relaxant across the Pacific for centuries, and while previously legal for individual use in Australia, The Calmer Co was the first to secure a licence for its import and retail distribution.

The opportunity was a somewhat more relaxing presence in a functional beverage market currently dominated by energy drinks, and a replacement offering amid dwindling alcohol sales.

But the company might have some cause to pop a bottle of champers after taking in its oversubscribed backing.

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