Calmer Co. Reports $4.4m H1 Sales, 270% Cash Receipt Growth, CEO Change Announced

Robust Sales Growth and Cash Flow Improvement

The Calmer Co. International Limited (ASX:CCO) has delivered a standout performance in the first half of FY25, posting $4.4 million in sales, surpassing the full-year sales of FY24 by a notable margin. This represents a more than 300% increase compared to the prior corresponding period, underscoring the company's accelerating momentum in the natural calming products market.

Quarterly cash receipts hit a record $2.6 million, marking a 270% uplift from Q2 FY24 and a 9% increase over Q1 FY25. This inflow has contributed to a significant reduction in net cash used in operations, which was halved to $142,000 per month in Q2 after accounting for a substantial inventory build.

Strategic Shift in Marketing and Sales Channels

CEO Dr Anthony Noble highlighted a deliberate recalibration of the company's online advertising spend. After reinvesting most net profits into eCommerce advertising to fuel growth, the company observed diminishing returns at higher investment levels. Consequently, social media advertising was scaled back by 57% in November and December, improving profitability and return on advertising spend by 45% over the last two months of the quarter.

Interestingly, retail sales through Coles supermarkets in Australia gained traction, with December sales at checkout surpassing online sales for the first time. This shift reflects growing consumer adoption of kava as a regular purchase, particularly when promoted in-store.

Operational Investments and Facility Upgrade

To support ongoing growth and prevent supply disruptions during a major factory upgrade in Navua, the company has increased inventory to $2.2 million at cost, equivalent to over $4 million at sales value. This inventory build, combined with expected operational efficiencies post-upgrade, is anticipated to reduce manufacturing costs in Q3.

Staffing costs rose slightly due to increased production hours required for the inventory build, while administration and corporate expenses remained stable. The company ended the quarter with $2.3 million in cash and equivalents, providing a comfortable buffer for upcoming operational needs.

Leadership Transition and Market Expansion

Significant leadership changes were announced, with Mr John Homewood appointed as Non-Executive Chairman and Mr Zane Yoshida set to take over as CEO from 1 February, succeeding Dr Noble who will remain on the board during the transition. The company is actively recruiting country managers for the USA and Australia to bolster sales and marketing execution.

Looking ahead, the launch of new Taki Mai® flavoured kava shots and stick packs on Amazon.com in March marks a strategic entry into the US ready-to-drink market, expected to be a key growth driver alongside continued contributions from Australia, Fiji, and B2B sales.

Outlook and Market Positioning

The Calmer Co. is positioning itself to capitalize on the expanding demand for natural relaxation products, with a diversified sales footprint spanning eCommerce, retail, and wholesale channels. The company’s focus on balancing profitable sales growth with cost control, combined with operational enhancements and leadership renewal, sets a foundation for sustained momentum in FY25 and beyond.