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Zoono Group (ASX:ZNO) - Managing Director & CEO, Paul Hyslop (Second from left)
Managing Director & CEO, Paul Hyslop (Second from left)
Source: Zoono Group
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  • It’s been a tough day on the market for sanitiser specialist Zoono Group (ZNO) following relatively soft cash receipts over the June quarter
  • The company tabled NZ$3.1 million (A$2.93 million) in customer receipts over the quarter, which is less than half of the company’s March quarter result
  • More than this, it’s a far cry below Zoono’s revenue from during the peak in the COVID-19 pandemic last year, when sanitiser demand was at its highest
  • Still, Zoono says it remains profitable and generated net positive cashflow of $1.6 million for the 2021 financial year
  • Zoono’s confidence was not enough to deter a sell-off on the ASX today, with shares in the company closing 15.92 per cent lower at 66 cents each

It’s been a tough day on the market for sanitiser specialist Zoono Group (ZNO) following relatively soft cash receipts over the June quarter.

The company tabled $NZ3.1 million (A$2.93 million) worth of customer receipts over the three months to the end of June — less than half of Zoono’s customer receipts from the March quarter.

The cash receipts were offset by operational spending of roughly NZ$6.1 million (A$5.77 million), resulting in net cash outflows of just under NZ$3 million (A$2.84 million).

Zoono ended the June quarter with NZ$4.9 million (A$4.35 million) worth of cash on hand.

The quarterly results take Zoono cash receipts for the 2021 financial year to NZ$30.5 million (A$28.85 million), alongside NZ$2.9 million (A$2.74 million) in receivables at the end of the quarter to complement Zoono’s cash balance.

Slowing sales

Zoono was first thrust into the spotlight in late 2019 after it reported significant success in treating African Swine Fever, a major threat to the world’s pig supply and global pork industry.

In just a matter of months, Zoono’s share price increased some 700 per cent from less than 10 cents each in October 2019 to over 65 cents by the end of December the same year.

Throw in the global pandemic in early 2020 and surging demand for hand and surface sanitisers — two of Zoono’s key products — and shares in the business skyrocketed to over $3 each in July last year.

For reference, during the early days of the pandemic, Zoono reported that it made $11 million worth of sanitiser sales in just 11 weeks.

Over the September quarter of 2020, Zoono posted NZ$15 million (A$14.19 million) in customer receipts, but momentum gradually slowed over the months thereafter, with December quarter receipts at NZ$5.5 million (A$5.2 million).

Steady distribution deals

Nevertheless, despite the dip in sanitiser demand and subsequent slowdown in sales, Zoono has continued working hard to expand across the globe, with important distribution deals signed in France, China, India, and Russia over the June 2021 quarter.

From China alone, Zoono said it has at least NZ$10 million (A$9.46 million) in contracted sales over the next 18 months from these distribution deals.

In France, Zoono said it has started selling to some French multinational customers, including the likes of Atalian, Keolis and Cleanysafe.

This is not to mention the “considerable time” Zoono has spent building its animal health segment, according to the company.

Future confidence

In light of this, Zoono management said the company is expecting its operating cash flow to improve in coming months.

It assured investors a capital raise isn’t on the cards at this point in time given the company is profitable and generated net positive cashflow of $1.6 million for the 2021 financial year.

More than this, Zoono said it has “large revenue streams” on the horizon, with operating cashflow for the September 2021 quarter already positive so far.

Still, Zoono’s confidence was not enough to deter a sell-off on the ASX today, with shares in the company closing 15.92 per cent lower at 66 cents each. The company has a $109 million market cap.

ZNO by the numbers
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