Key Highlights

  • Revenue from continuing operations increased 5.8% to $7.2 million in H1 FY2026 from $6.8 million a year earlier.
  • Gross Margin expanded to 43% from 33%, while operating expenses fell 25% to $3.3 million.
  • Adjusted EBITDA loss narrowed to $0.1 million from $2.1 million, while statutory net loss after tax improved to $1.1 million.
  • Net operating cash outflow decreased 49% to $0.7 million, although the company continued to disclose a material uncertainty regarding going concern.

Elixinol Wellness Limited (ASX:EXL) was quoted at $0.0070 on 31 August 2026, unchanged on the day at 3:55pm GMT+10. The share price data accompanied the company's announcement of materially improved H1 FY2026 operating results. Revenue from continuing operations increased 5.8% to $7.2 million, while the adjusted EBITDA loss narrowed substantially as gross margins expanded and operating expenses declined.

Revenue Growth Across Core Australian Businesses

Elixinol's continuing operations generated $7.2 million in revenue during the first half of FY2026, compared with $6.8 million in H1 FY2025. The 5.8% increase was driven primarily by three Australian businesses: The Healthy Chef, Hemp Foods Australia and Australian Primary Hemp Ingredients.

The Healthy Chef generated an additional $0.4 million in revenue, representing 22% growth, supported by retail expansion and activation through Priceline. Hemp Foods Australia also increased revenue by $0.4 million, or 14%, while Australian Primary Hemp Ingredients grew revenue by $0.2 million, or 16%.

The company said these businesses collectively delivered double-digit revenue growth despite cost-of-living pressures and compared with approximately 4% sales growth reported by Australia's major supermarket groups.

Gross Margin Expansion Changes Earnings Profile

Gross margin increased to 43% from 33% in the corresponding period. The 10-percentage-point improvement was attributed to a greater contribution from higher-margin brands and a more favourable product and channel mix.

Hemp Foods Australia's gross margin increased to 48%, while the margin for Hemp Ingredients improved to 38%. The improvement in gross profitability occurred alongside revenue growth, increasing the amount available to cover operating expenses.

The margin development was particularly important to the group's adjusted EBITDA result, as the Business simultaneously reduced its cost base.

Operating Expenses Fall 25%

Operating expenses declined by $1.1 million, or 25%, to $3.3 million from $4.4 million in H1 FY2025. Combined with the higher gross margin, the lower expense base resulted in a substantial improvement in underlying operating performance.

Adjusted EBITDA loss narrowed to $0.1 million from a $2.1 million loss a year earlier. The $2.0 million improvement leaves the business close to adjusted EBITDA breakeven on the continuing operations reported for the period.

The statutory result also improved. Net loss after tax declined to $1.1 million from $3.1 million in H1 FY2025, representing a $2.0 million reduction. The statutory result included a $0.1 million loss from the discontinued US business.

Cash Flow Remains a Financial Consideration

Net operating cash outflow fell 49% to $0.7 million from $1.4 million in H1 FY2025. The improvement occurred despite the absence of a $0.5 million insurance recovery that had benefited the prior corresponding period.

Closing cash was $1.0 million at 30 June 2026, compared with $1.1 million at the end of H1 FY2025. The company subsequently completed a Convertible Note offer approved at its May 2026 AGM, with subscriptions of $1.055 million received as of 31 August. This included $0.755 million of secured Loan balance transferred into the Convertible Note offer.

Elixinol continues to disclose a material uncertainty related to going concern. Directors have prepared the interim financial statements on a going-concern basis, taking into account cash-flow forecasts, the Convertible Note proceeds and expected proceeds from the planned US business divestment.

US Divestment and Business Simplification

Elixinol has executed an agreement to sell the Assets of its US business, although completion remains subject to customary conditions. The transaction is intended to simplify the group and concentrate resources on its Australian health and wellness operations.

The Australian portfolio includes The Healthy Chef, Hemp Foods Australia and Mt Elephant, together with ingredient businesses Australian Primary Hemp and The Australian Superfood Co. Products are distributed through grocery, wholesale and ecommerce channels.

The divestment represents a further step in narrowing the group's operational focus following a period of restructuring.

H2 FY2026 Priorities

For the second half of FY2026, Elixinol's priorities include completing the US divestment, sustaining the improvement in operating Cash Flow and expanding distribution. The company also plans to pursue new product launches and additional business-to-business contracts.

Management continues to assess potential mergers and acquisitions that could use the group's existing infrastructure, capabilities and distribution channels. The focus remains on expanding the Australian portfolio while maintaining the lower operating cost base achieved during the first half.

Conclusion

Elixinol Wellness delivered a materially improved operating result in H1 FY2026, with revenue from continuing operations rising 5.8% to $7.2 million, gross margin expanding from 33% to 43% and operating expenses falling 25%. These changes reduced the adjusted EBITDA loss from $2.1 million to $0.1 million and lowered the statutory net loss to $1.1 million. Operating cash outflow also improved, although the group ended June with $1.0 million of cash and continues to disclose material uncertainty regarding going concern. The planned US divestment and focus on the Australian health and wellness portfolio are central to the company's next phase, while maintaining revenue growth and cash-flow improvement remain key operating priorities.