TIDMCHLL
RNS Number : 2013B
Chill Brands Group PLC
29 September 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF EU REGULATION 596/2014 (WHICH FORMS PART OF
DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT
2018), AS AMED BY REGULATION 11 OF THE MARKET ABUSE (AMMENT) (EU
EXIT) REGULATIONS 2019/310.
29 September 2022
Chill Brands Group plc
("Chill Brands" or the "Company")
AGM Statement
Chill Brands Group, the international consumer packaged goods
company, will hold its Annual General Meeting ('AGM') today at
3.00pm (BST) at the offices of Allenby Capital Limited, 5th Floor,
5 St Helen's Place, London EC3A 6AB. At the AGM the Company's Chief
Executive Officer, Callum Sommerton, will make the following
statement:
"Our AGM is upon us again and our report and accounts for the
financial year ended 31 March 2022 will be released shortly,
providing reflective commentary on the Company's financial and
operational performance. Comparatively, this statement is intended
to provide a forward-looking review of the Company's status today
along with its prospects for the future.
It will come as no surprise to anyone who has followed Chill
Brands for some time that the Company encountered significant
difficulties during the period ended March 2022. These challenges
were addressed by fundraising activities carried out in April and
May which ultimately led to a restructuring of the Group's
management team and operating model.
Since being appointed as Chill Brands' Chief Executive Officer,
my priority has been to reduce spending and redress flaws within
the Company's approach to sales and marketing. While this work is
ongoing, we have taken considerable strides to provide the Company
with a firm foundation from which to grow both in terms of revenue
and shareholder value.
I am pleased to provide this update on our progress and look
forward to sharing further information about the Group's
development during the weeks and months to come.
Financial Management
Responsible management of the Group's finances is an essential
part of correcting past mistakes and planning for the future. Since
April, we have scrutinised every aspect of the business to ensure
that funds are allocated only to activities for which there is a
strong business case and a clear path to return on investment. Our
work so far has led to a major decline in recurring expenses that
is estimated to amount to an annual reduction of at least US
$1,000,000.
In addition to cost cutting measures, we continue to implement
strong controls to improve financial governance and accurately
assess the health of the business. These steps will better enable
us to further reduce our cash burn rate, extend our runway, and
ultimately deliver a Company that is cash flow positive.
Retail Operations
Having previously struggled to resource the planned rollout of
products into a wider group of US convenience store locations, we
have reconfigured the Company's approach to the retail channel. The
Company's complex master distribution agreement has been brought to
a close and we have developed essential internal infrastructure to
help us manage and scale Chill Brands' retail footprint.
The Company recently signed agreements with additional brokerage
partners and we have started to receive purchase orders in
connection with new stores and distributors, which we expect to
continue and accelerate over the next two quarters. Separately, and
in line with renewed branding and marketing strategies, we are now
distributing updated sales collateral materials to retail stores
with the aim of improving brand recognition and sell through
rates.
Chill Brands is now working with partners that know its
business, understand its products, and have the connections and
industry knowledge to help the Company scale. The Company's efforts
start again from a firm baseline of retail locations including 363
branches of Yesway/Allsup's, 157 Smoker Friendly outlets, and 80
independent vendors with further expansion planned during the
remainder of 2022 and beyond. The Company also aims to commence
sales pilot programmes to establish new routes to market and will
provide further information as additional distribution agreements
are executed.
eCommerce Operations
After announcing a switch to an eCommerce-led sales strategy in
January 2022, the Company has been working to redevelop Chill.com
which will launch in October. Following the release of the improved
website, our strategy will be fixed around marketing fundamentals
including search engine optimisation (SEO) and conversion rate
optimisation (CRO).
Even without the implementation of an effective marketing
strategy the Chill.com site has contributed significantly to our
sales performance during 2022, having generated in excess of
$20,000 gross monthly sales during certain peak periods. I expect
this performance to improve as we assign greater attention,
resources, and expertise to our digital sales channels.
Over time we have also replaced certain discontinued marketing
activities from the past year with new campaigns that are
considered more relevant to the Chill brand and its customers. This
has included a grass roots social media marketing drive in
collaboration with influencers who in many cases have accepted
sample products in lieu of cash payments. These social media
personalities have a combined follower count in excess of 5 million
and their posts have generated organic exposure for the Chill brand
which we will continue to pursue on an ongoing basis.
In addition to our own sales activities, we continue to hold
discussions with select brands with a view to onboarding their
products to Chill.com as we seek to build on the concept of a
wellness and relaxation marketplace. These conversations will be
supported greatly by the launch of our new site with further
updates to follow.
Brand and Product Development
In concert with adjustments to our retail and eCommerce
strategies, we have also been undertaking a complete refresh of the
Chill brand. Its new identity and appearance have been meticulously
crafted in line with market analytics to create a brand that
reflects consumer trends and is more appealing to those customers
who are most inclined to buy the Company's products.
I am also pleased to report that a number of product development
projects are now underway. These efforts are intended to diversify
the Company's range such that it will comprise both premium CBD
products and other products that contain alternative natural
ingredients. Early discussions with the Company's distribution
partners suggest there is strong demand for the proposed new
products and further details will be shared as these projects
progress.
Outlook
After what has been an incredibly difficult year for the
Company, I find that there are still many reasons to be optimistic.
Chill Brands is a promising business with valuable assets the likes
of which are not a common feature of comparable consumer goods
companies.
Our ownership of the Chill.com domain has been a consistent
source of interest from organisations much larger than ourselves
and it has value both as we build our brand but also as a digital
asset that could generate significant funds for the Company on any
eventual sale. We also continue to progress through rounds of
testing in relation to our unique seed genetics and will provide
further information regarding routes to commercialisation for those
biological assets in due course. Finally, the Company sells what
our team believes to be some of the most differentiated products
developed by any CBD brand on the market today. Our CBD chew
pouches consistently attract new customers seeking alternatives to
mainstream oral tobacco products, while our unique CBD isolate
infused herbal smokes have recently invited interest from new sales
venues which we hope to open shortly. I am sure that these novel
products will bear fruit when paired with our updated brand and
marketing strategy.
Much of our work in stabilising the Company and re-energising
the Chill brand has yet to become visible, but we are working
tirelessly to realise our vision of a differentiated and above all
profitable wellness business with an expanded product range and the
ability to scale. I believe this can only be delivered by building
a solid framework for omnichannel sales, ensuring that we can
continue to advance online and in stores without exhausting our
resources. There is still much to be done and it is essential that
the Company begins to execute. We can no longer focus on the
relative strength of our partners and advisors or disguising our
roadmap from competitors, but must instead be driven by revenue
growth and tangible progress.
I am grateful to our shareholders for their support of the
Company through what has been an exceptionally challenging period.
Thank you for your patience, I am confident that the future of
Chill Brands is bright."
-S-
About Chill Brands Group
Chill Brands Group plc (LSE: CHLL, OTCQB: CHBRF) is an
international company concerned with the development, production,
and distribution of best-in-class hemp-derived CBD products,
tobacco alternatives and other consumer packaged goods (CPG)
products. The Company operates primarily in the US, where its
products are distributed online and via some of the nation's most
recognisable convenience retail outlets. The Group's strategy is
anchored around lifestyle marketing that is designed to enhance the
popularity of its products, channelling visitors to its landmark
chill.com website.
Publication on website
A copy of this announcement is also available on the Group's
website at http://www.chillbrandsgroup.com
Media enquiries:
Chill Brands Group plc contact@chillbrandsgroup.com
Allenby Capital Limited (Financial
Adviser and Broker) +44 (0) 20 3328 5656
Nick Harriss/Nick Naylor (Corporate
Finance)
Kelly Gardiner (Equity Sales)
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