Peak Processing’s Revenue Plunges 47.7% as Losses Triple in H1 2026

Revenue and Losses Deepen Amid Market Pressures

Peak Processing Limited, a cannabis products manufacturer listed on the ASX, revealed a challenging first half of the 2026 financial year with revenues falling sharply by nearly half to $5.49 million. This decline was accompanied by a substantial increase in losses, which ballooned to $5.43 million after tax, a 257.7% rise compared to the previous corresponding period.

The company’s results were further impacted by a non-cash impairment charge of $4.35 million related to its North American manufacturing assets, reflecting ongoing operational and market headwinds. This impairment was driven by revised cash flow forecasts and a tightening liquidity position, underscoring the difficulties facing the cannabis sector amid evolving regulatory and competitive landscapes.

Subsidiary Administration and Recovery

During the period, Peak Processing’s wholly owned subsidiary, Althea Company Pty Ltd, underwent voluntary administration starting in July 2025. The subsidiary entered into a Deed of Company Arrangement (DOCA), which was successfully implemented and terminated by mid-December 2025, allowing the parent company to regain control. This process contributed a $2.55 million profit from discontinued operations, primarily from accounting gains related to creditor compromises rather than ongoing trading performance.

Capital Raises and Leadership Changes Signal Strategic Reset

In response to financial pressures, Peak Processing completed a $2.53 million equity raising during the half-year and followed up with a further $2.72 million placement in early February 2026. These capital injections aim to bolster working capital and support ongoing operations amid net liabilities exceeding $3 million and a material uncertainty regarding the company’s ability to continue as a going concern.

Leadership changes also marked the period, with Manik Pujara appointed Chairman in November 2025, succeeding Vaughan Webber, and Barry Katzman stepping in as CEO and Managing Director in December 2025. These moves suggest a strategic effort to stabilize the company and navigate the complex cannabis manufacturing environment.

Outlook and Operational Adjustments

Management has undertaken a comprehensive review of organisational structure and cost base, implementing reductions expected to generate annualised savings and improve cash flow. The company continues to explore refinancing options for its secured loan facility, which matures in May 2026, and remains cautious about future funding needs given the sensitivity of its impairment assumptions and ongoing market uncertainties.

While the directors express confidence in continuing as a going concern, the financial statements highlight significant challenges ahead, including the need to sustain revenue growth, manage costs, and secure stable funding to support its North American cannabis manufacturing operations.