Little Green Pharma Ltd (LGP.XA) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to Little Green Pharma's Annual General Meeting. My name is David Tasker, and I will be your host today. A few quick housekeeping notes for our webinar today. This AGM is conducted entirely online. Attendee cameras and microphones are disabled for the duration of the meeting. For questions, please use the Q&A button at any time and include your name and whether you're a shareholder or a proxy. We'll take questions on each item of business and again, during a general Q&A after the company update. I'll now invite the Chair to open the meeting and conduct the formal business. After that, Managing Director, Paul Long, will provide a company update and the order of proceedings will follow the Notice of Meeting circulated to all shareholders. It's my pleasure to introduce Michael Lynch-Bell, Chair of Little Green Pharma. Michael, over to you. We look like we may have a slight technical...

Have you got me now?

Yes, we do. Thanks, Michael.

Apologies about that. Technical issues are all mine, I think. So good morning from London, good afternoon, everybody. And I'd like to add my welcome to everybody to our AGM today. As David said, I'm Michael Lynch-Bell. I'm the Chair of Little Green Pharma, and I will chair the meeting today. As the time is now after 3:30 p.m. and a quorum of shareholders is present, I formally declare the meeting open. I'd like to introduce my fellow directors and the management team in attendance today, Dr. Neale Fong, who's a Non-Executive Director; Paul Long, our Managing Director; Angus Caithness, one of our Executive Directors; and Fleta Solomon, our other Executive Director. I'd also like to introduce our Company Secretary, who's also part of the executive team, Alistair Warren. In addition, a representative from our external auditor, BDO, Jack Symes, is present. If there are any questions or matters to be directed to the auditors, then I will refer them to him. Lastly, our external counsel, Hamilton Locke, represented by Jeremy Newman, is also present. All shareholders were notified by letter dated the 24th of July 2025 of where to access the notice of this Annual General Meeting. Accordingly, the notice is taken as read. The order of proceedings for today's meetings will be consideration of the agenda items as set out in the notice. We'll take questions from shareholders through the Q&A section in the Zoom application on each of the items of business as we deal with those matters. Once all resolutions have been read, this will be followed by a vote on the resolutions to be conducted by way of a poll by our Company Secretary. The results of the poll will then be announced to the ASX after the close of the meeting. Following closure of the formal business and poll, our Managing Director, Paul Long, will provide a presentation and update on the company. Lastly, we will hold a discussion on any questions from shareholders received in advance of the meeting as well as any further general questions any shareholder may have submitted via the Q&A section in Zoom. I wish to state that it is my intention to vote the proxies vested in me in favor of each of the resolutions to be put before today's meeting. Details of the proxy appointments received by the number of votes, including whether the proxy is directed to vote in a particular way, abstain or is open to be voted at my discretion will be shown on the screen for your information. It's not my intention to read voting exclusion statements or voting prohibitions, which may apply to resolutions. These are set out in full in the notice. I will now turn to the business set out in the notice. The first item of business is to receive and consider the financial report for the company and the related reports of the directors and auditors for the financial year ended the 31st of March 2025. No written questions to the auditor under Section 250PA of the Corporations Act were received by the cutoff date 5 business days before this meeting. The questions may be directed through myself to our auditor in relation to the conduct of the audit, the audit report, the company's accounting policies or the independence of the auditor. Taking into consideration the comments already made in my address, does anyone have any questions or comments on the financial statements or report? Also for any shareholders attending via Zoom, this is now the opportunity to ask any questions, and I will pause briefly.

No questions received, Michael.

Thank you. As there are no questions and as this matter does not require a vote, we will move on to the first formal resolution. Resolution 1, our remuneration report. Resolution 1 seeks approval for the adoption of the remuneration report for the financial year ended the 31st of March 2025. A copy of the resolution is set out in the notice of meeting and the proxies received in respect of this resolution are shown on the screen. The proxy votes received are for 89,031,838, against 3,651,997 and those given to me as Chair to vote 306,467. Does any shareholder have any questions or comments? This is now the opportunity to ask any questions, and I will pause briefly.

No questions received, Michael.

Thank you. Since there are no questions or comments, I now exercise my power as Chairman to demand the poll on this resolution. Resolution 2, the spill resolution. I refer you to Resolution 2 of the Notice of Meeting, which refers to a spill resolution. As set out in the Notice of Meeting, if less than 25% of the votes cast on Resolution 1 are voted against adoption of the remuneration report, the Chair will withdraw -- I will withdraw this resolution. You can see the proxies received in respect of this resolution, which are shown on the screen. As this has been withdrawn, I won't read them out. As seen in the proxy voting results for Resolution 1, only 4% of votes have been cast against Resolution 1. And based on the proxy voting, this resolution can be withdrawn. However, given that a poll is to be conducted, we will wait until the poll results have been received to formally withdraw this resolution. To be clear, the results of this resolution and whether it is withdrawn will be included in the published results of the AGM to be released to the ASX following this meeting. Does any shareholder have any questions or comments at this time?

No questions received, Michael.

Thank you. Since there are no questions or comments, I can now -- I now exercise my power as Chairman to demand the poll on this resolution. Resolution 3, election of Director, Paul Long. This resolution seeks approval for the election of Paul Long as a Director of the company. This is an ordinary resolution requiring 50% or more votes to be in favor to be passed. A copy of the resolution is set out in the notice of meeting and the proxies received in respect of this resolution are shown on the screen. The proxy votes received are for 127,012,816; against 2,866,534 and those given to me for my discretion, 306,467. Does any shareholder have any questions or comments? This is now the opportunity to ask those questions.

No questions received, Michael.

Thank you. Since there are no questions or comments, I now exercise my power as Chairman to demand a poll on this resolution. Resolution 5 -- Apologies. Resolution 4 was the election of Director David Fenlon. Resolution 4 considers the election of Mr. David Fenlon as a director. As noted in the ASX release dated the 20th of August 2025, Mr. Fenlon is retiring from his position as a Director of the company, effective at this AGM. As a result, Resolution 4 has been withdrawn and the proxy voting results will therefore not be tabled. Resolution 5, reelection of Director, Angus Caithness. The resolution seeks approval for the election of Angus Caithness as a Director of the company. This is an ordinary resolution requiring 50% or more votes to be in favor to be passed. A copy of the resolution is set out in the notice of meeting and the proxies received in respect of this resolution are shown on the screen. The proxy votes received are for 126,881,228; against 2,998,469 and those for my discretion, 306,467. Does any shareholder have any questions or comments? This is now your opportunity to ask any questions.

No questions received, Michael.

Thank you. Since there are no questions or comments, I now exercise my power as Chairman to demand a poll on this resolution. Resolution 6, reapproval of the long-term incentive plan or LTIP. This resolution requires -- seeks the reapproval of the company's long-term incentive plan. This is an ordinary resolution requiring 50% or more votes to be in favor to be passed. A copy of the resolution is set out in the notice of meeting and the proxies received in respect of this resolution. are shown on the screen. The proxy votes received are for 89,030,042 against 3,695,247 and those given to me my discretion, 307,785. Does any shareholder have any questions or comments? This is now your opportunity to ask any questions on this motion.

No questions or comments received, Michael.

Thank you. Since there are no questions or comments, I now exercise my power as Chairman to demand a poll on this resolution. Now, Resolution 7, approval of potential termination benefits. This resolution seeks approval for the giving of benefits to any current or future person holding a managerial or executive office of the company or a related body corporate in connection with that person ceasing to hold office on the terms and conditions in the notice of meeting. This is an ordinary resolution requiring 50% or more votes to be in favor to be passed. A copy of the resolution is set out in the notice of meeting and the proxies received in respect of this resolution are shown on the screen. The proxy votes received are for 80,949,753; against 11,720,236 and those given to me for my discretion, 306,467. Does any shareholder have any questions or comments? This is now the opportunity to ask any questions, and I will pause briefly.

No questions received, Michael.

Thank you. Since there are no questions or comments, I now exercise my power as Chairman to demand a poll on this resolution. Resolution 8, approval of the 10% placement facility. This resolution relates to the approval for the company to have additional capacity to issue equity securities provided for in Listing Rule 7.1A on the terms and conditions in the notice of meeting. This is a special resolution requiring 75% or more votes to be in favor to be passed. A copy of the resolution is set out in the notice of meeting and the proxies received in respect of this resolution are shown on the screen. The proxy votes received are for 66,660,159; against 63,394,946 and those given to me from my discretion, 306,467. Concerning Resolution 8, does any shareholder have any questions or comments? This is now your opportunity to ask any questions.

No questions received, Michael.

Thank you. Since there are no questions or comments, I now exercise my power as Chairman to demand a poll on Resolution 8. As the next resolution includes a reference to myself, I will pass the Chair of this meeting on to Paul Long to read out this resolution. Thank you.

Thank you, Michael. Good morning and afternoon, everyone. Resolutions 9a, 9b and 9c, approval of issue of nonexecutive retention rights. These resolutions seek approval for the issue of retention rights to nonexecutive directors of the company, specifically Resolution 9a for the issue of up to 300,000 nonexecutive retention rights to Michael Lynch-Bell. Resolution 9b for the issue of up to 150,000 nonexecutive retention rights to Dr. Neale Fong and Resolution 9c considers the issue of up to 150,000 nonexecutive retention rights to Mr. David Fenlon or his nominees. As previously noted, Mr. Fenlon is retiring from his position as a Director of the company effective at this AGM. And as a result, Resolution 9c has been withdrawn and the proxy voting results will therefore not be tabled. Resolutions 9a and 9b are ordinary resolutions requiring 50% or more of the votes to be in favor to be passed. A copy of the resolutions as set out in the notice of meeting and the proxies received in respect to this resolution are shown on screen. The proxy votes received are Resolution 9a for 28,941,557; against 63,727,750 and Chair's discretion 306,467. Resolution 9b for 28,932,293; against 62,839,001 and Chair's discretion 356,467. Concerning Resolution, a, does any shareholder have any questions or comments? Now is the opportunity to ask any questions.

No questions received, Paul.

Thanks, David. Concerning Resolution, b, does any shareholder have any questions or comments? This is now the opportunity to ask any questions.

No questions received, Paul.

Thanks, David. Since there are no further questions or comments, I now exercise my power as Chairman to demand a poll on Resolution 9a, Resolution 9b and Resolution 9c. I'll now hand the Chair back to Michael.

Thanks, Paul. Resolution -- this is now Resolutions 10a, 10b and 10c, approval of issue of LTIP options. These resolutions seek approval for the issue of retention rights to executive directors of the company, specifically Resolution 10a for the issue of up to 2 million LTIP options to Mr. Paul Long, Resolution 10b for the issue of up to 2 million LTIP options to Mr. Angus Caithness and Resolution 10c for the issue of up to 1.2 million LTIP options to Ms. Fleta Solomon. Each are ordinary resolution requiring 50% or more votes to be in favor to be passed. A copy of the resolutions are set out in the Notice of Meeting and the proxies received in respect of this resolution are shown on the screen. The proxy votes received are for 10A, 88,919,574 against 3,739,033, for the Chair's discretion, 336,467. In respect 10b for 88,882,282 against 3,784,172; Chair's discretion 336,467 and for Resolution 10c for 88,891,864; against 3,785,972 and for the Chair's discretion 336,467. Concerning Resolution 10a, does any shareholder have any questions or comments? This is now your opportunity to ask any questions.

No questions received, Michael.

Thanks, David. Concerning Resolution 10b, does any shareholder have any questions or comments?

No questions received, Michael.

Thank you. And concerning Resolution 10c, does any shareholder have any questions or comments?

No questions received, Michael.

Thanks, David. Since there are no questions or comments, I now exercise my power as Chairman to demand a poll on Resolution 10a, Resolution 10b and Resolution 10c. Now to Resolution 11, reinsertion of proportional takeover bid approval provisions. Resolution 11 seeks approval for the modification of the company's constitution to reinsert the proportional takeover bid approval provisions for a period of 3 years from the date of approval of this resolution. This is an ordinary resolution requiring 50% or more votes to be in favor to be passed. A copy of the resolution is set out in the notice of meeting and the proxies received in respect of this resolution are shown on the screen. The proxy votes received are for 126,607,808; against 3,190,985 and for Chair's discretion, 337,667. Concerning Resolution 11, does any shareholder have any questions or comments? This is now your opportunity to ask any questions.

No questions received, Michael.

Thank you, David. Since there are no questions or comments, I now exercise my power as Chairman to hold a poll on Resolution 11. It's now time for us to conduct a poll on the resolutions being put to the meeting. If you are a shareholder, proxy, corporate representative or authorized attorney and wish to vote at this meeting or change your previously submitted proxy vote, then e-mail your previously requested poll form to the Company Secretary. We will now have a brief break while any poll forms are returned. Thank you. [Voting]

And to be clear, by the way, on Resolution 9c, that was withdrawn. So there will be no vote or poll on Resolution 9c that was one that referred to David Fenlon. [Voting]

We will now resume the meeting. The Company Secretary will compile the voting results and announce them to the ASX following the end of this meeting. Ladies and gentlemen, that concludes the formal business of the meeting, and I formally close the meeting at whatever time it is in Perth. On behalf of the Board of Management, I'd like to thank you for your support. Thank you, everyone, for attending the formal part of today's meeting. I'd now like to invite Paul, our Managing Director of Little Green Pharma, to provide a company update. So over to you, Paul.

Thank you, Michael, and thanks, everyone, for joining again. David, I think you're going to run the screen for me, please. Well, I think we'll kick off really, I think we sit here today at another AGM. And we believe -- we're now 9 years as a company into our evolution. And I firmly believe that we're really about to hit a really exciting phase in our history. For a long time, it felt like the medicinal cannabis industry in this country and perhaps even globally has been a new industry. But I think we can officially sit here today and take the view that we really are evolving into a mature market. And I firmly believe that Little Green Pharma, the foundation that we've built is incredibly well-positioned to capitalize on what I believe will be a pivotal year for our industry, both in Australia and globally. Thanks, David. We'll just flip to Slide 3. Quick summary for those that are not completely familiar with the Little Green Pharma story. I won't spend too much time on this one, but we are one of the largest pure-play medicinal cannabis companies globally. We're a vertically integrated business, which has been a real plus to the evolution of our business model. We operate 4 facilities really across the globe between Europe and Australia. And this really allows us to capture value across the supply chain. We're a leading supplier into rapidly growth -- the rapid growth market, so the German market, the U.K. market, we're the largest supplier into the French trial, which will evolve into a medical market very soon now at the start of next year. And we're distributing -- we've got distributing partnerships in 8 other European markets, including Poland and Switzerland. We're one of the most trusted suppliers in the Australian and European market, and we have 31 products under multiple brands now, which has been part of our strategy over the last 24 months. And as I said, I really do think we're very well placed for sector consolidation, and we're beginning to see a lot of that and very well placed for what we believe is a potential rerating in the near future across the global market. Thanks, David. So a couple of highlights to run through here for the financial year 2025. I think it really was a strong year for us that we saw an increased revenue of 43%, up to $36.8 million and a net profit after tax of $3.3 million and an adjusted EBITDA of $2.9 million. So very, very strong financial results for us in FY 2025. And that also came off the back of a continued growth from the 5 years earlier. In fact, I think our compound annual growth rate of top line revenue for the last 5 years is 52%. And so what we really saw in this financial year was a big surge in the German market. We saw a down scheduling of THC as a narcotic and a rapid rise in the volume of cannabis being dispensed inside the German market. Our Danish facility incredibly well-positioned, an asset that we own outright, very minimal debt actually, just 2 hours from that border. So we were -- the timing of having that site and our ability to scale into that volume has been significant for this financial year. So that's been really significant. The other thing we saw recently was Portugal being one of the other big suppliers into the German market, a tightening of the regulatory pathway where we saw some GMP washing into that market meant that there was even more demand for our Danish-produced product. We continue to expand the Danish facility. We've always taken a very conservative approach to the CapEx expansion required inside the Danish facility. But with caution and with an eye on cash provisions, we did expand this year. So we expanded into another room at 2.4 tonne capacity, and we've also gone into another room as we speak, or that's happening at the moment. So this will continue to drive down our cost position on what we're producing. We really do believe that this will bring us to a really cost-competitive position outside of that site as we continue to scale. So we're sitting at about 8 to 9 tonne capacity once those rooms open up, and we believe we can get that site up to about 21 tonnes. We're seeing strong growth, and we're continuing to expand those rooms as demand requires. The beautiful part about that site itself for those that know our story, we acquired that site for CAD 21 million a number of years ago now, in fact, over 4 years ago. But the actual capital spent on that site from the previous owner was well in excess of $100 million. So it's an incredible site. It's certainly the jewel in our crown, and we believe that not only is it a fantastic site that's well-positioned, but we're now seeing that cost-competitive scenario with that site as we scale into volume. Within the financial year, we also saw and heard about some changes in the Danish regulatory pathway. This will kick off from January next year and will, we believe, have quite a significant impact on what we can do, and I'll talk a little bit more about that in my presentation. Within the year, it was a bit of a breakout year for the U.K. market as well. We saw some significant growth into the U.K. There's still a restriction around access by specialists in the U.K., but we really saw this transformation of some high-volume clinics inside that market. And as a result, we saw some really increased month-on-month growth volumes for us, which is great. The French market, as I mentioned, has long been a focus for us, and we were very successful to win that tender a number of years ago, supported that market. We've been really quite successful in profitably delivering product for a number of years into that market. But the real exciting milestone will kick off next year when we'll see a legalized medical market and Little Green Pharma is incredibly well-positioned to capture a significant chunk of that market when that opens up. Over the year, we saw various M&A discussions kicking off. We acquired Health House International, which is a known distributor to us here in Western Australia and in Australia. And that has been a very, very successful transition into the Little Green Pharma brands. And we continue to have multiple other discussions with Australian companies, European companies and North American groups as well. Our cash flows were also supported in this year by $5 million of inventory and asset financing, which has really supported our balance sheet and given us a strong position to really drive into the next financial year. And towards the back end and more recently, we've also heard some rumors around the Trump administration proposing a down schedule of cannabis, and I'll talk a bit more about that a bit later on about how we believe that could impact our market and our share price down. Thanks, Michael -- David. I've touched on a few of these financial highlights, but a few on this page I'll refer to. Point 4 there, the NTA or our net tangible asset position. I spoke about the property that we have up in Denmark. It's not just the property, the building a farm next door, multiple houses. We have a net tangible asset position of over $70 million in the company with a market cap of only $35 million, roughly. So per share, $0.24 per share NTA versus a share price of $0.11 to $0.12. So we believe setting us up for a really position of undervalued, but an opportunity for growth and that overlaid with really minimal debt. I think we see some of our competitors have been able to be in a similar position, but have got a significant debt position, which will be a challenge for them in this market. As I mentioned before, with the finance facility, along with cash at bank 30 June of $2.5 million, we believe that we're well funded. And I've mentioned Health House. And most importantly, for the financial year, we received a clean audit opinion, which sets us up for ongoing finance discussions if required for the business. Thanks, David. Just wanted to visually share a few images of our 2 big assets. So on the right-hand side, you'll see an internal picture of our West Australian facility. This is a subcontracted site now down in the Southwest region of Western Australia. It's a pristine indoor facility. And what we've been able to successfully achieve with that site with the subcontracting is a pivot towards craft flower. And so the operators that are now running that site for us have made some changes, things like -- they're now doing a 21-day cold cure. They're doing hand trimming only on the flower, and that enables us to really sell that product into a more premium end of the cost category here in Australia and maintain a really solid margin. That site has a capacity of just over a tonne. And so our ability to ensure that we're producing higher products with a higher premium RRP in this market was critical. So that was a transition we made this year, and it's been very, very successful to date. The picture on the left-hand side is, as I mentioned before, the big jewel in our crown up in Denmark. You can see that the glass houses at the back is where we cultivate and the big gray building at the front of the image there is the GMP and the laboratory side. So yes, as I mentioned, very much a gold-plated site. At this stage, somewhat underutilized. But if we refer back to the last 12 months from our last AGM to today, we've made a significant increase in the volume, largely driven by that German demand, and we expect to see that continue. So we really -- we're seeing the results now from that decision to invest in that site. Thanks, David. A quick snapshot of the update of the Australian market. We continue to see the market grow and it's certainly a fast-growing cannabis market if we compare that globally. There is certainly an increased competition inside this market, and we've certainly seen price compression inside the market from imported products as well. More recently, for those that have watched our space would have noted there's been quite a bit of negative media towards the medicinal cannabis industry. This has resulted in a TGA looking to conduct a regulatory review into the industry. We will be playing an active role in that submission. My role on the industry board being MCAA will be playing a role and as a business, will be playing an active role in passing comment on to that advisory pathway. Look, we, as a general rule, applaud this. We believe that it's been long required that we really look to tighten up this industry. And as a company, we've certainly been one to dot the i's and cross the t's. So we do think this is a positive step for the industry. We do also believe this will likely involve more consolidation in the market, and we're very well positioned to capitalize on that as well. Thanks, David. The 3 markets in Europe, I'll touch on Germany, France and U.K. Obviously, for those that follow us know that we are very actively operating in other markets inside the European market and progressing well, but these are our really big focuses as an organization. So the German market continues, as I mentioned, to grow. I mean some of the facts that we've got here on the screen since -- so last calendar year, so calendar year 2024, there was 72 tonnes of product imported into the German market. However, in the first 6 months of calendar year 2025, there was 81 tonnes into that market. So it gives you a feel on the scale of the growth that we're seeing into that market. And to remind everyone, we've got a 21-tonne site just 2 hours from the German border. We literally can cultivate, manufacture product that we believe is very competitive on a price level and deliver that straight into that market. And we do -- it's important to note in Germany that a big percentage of our market is through partnerships and producing product for white label brands into that market. We have recently launched our own brand, but a lot of those are driven through purchase orders. And what we have actually seen is a commitment of purchase orders all the way through until June 2026, almost 12 months in advance. So that really underpins the growth of the site and our continued investment in more rooms and a little bit more CapEx into the site. There has been a change in the governor in the coalition inside the German market. They have retained the adult-use legalization, and there will be a review -- regulatory review expected towards the end of this calendar year. The French market, as I mentioned, we have been the first mover inside that market through a trial. Our dossier submissions as a registered -- a quasi-registered medicine is in hand, and we will be submitting those dossiers very, very soon, and we'll have products in market at the start of 2026. So that market, we don't -- there will be a limitation on flower as we see -- as the product that we see significant growth in most markets to begin with at least, but we're very well positioned across our other portfolio to deliver products. So we don't expect to see the rapid rise in the volume that we have seen in the German and Australian and perhaps even the U.K. market to begin with. But for those that recall the industry, the Australian market began quite slowly when it was driven behind specialists and when there was a limited flower supply, and we really saw the volume increase rapidly. The exciting thing about the French market will be a reimbursement of products and a fixed price by the French government. So a very different market to any other market globally, a very restricted market for dossiers, and we will have first mover into that market. So we've been certainly talking about France for a long time, but we will -- next year will be really our breakout year into that market. And as I mentioned, U.K. is continuing to grow significantly month-on-month growth, and we'll continue to drive into that market. Thanks, David. Quick peer comparison here for this calendar year. We -- if you look at the top blue line there is a company called Bioxyne or BLS operating here in Australia. They certainly have been the outlier. They're a contract manufacturer into the Australian market and really had some strong success in our capital market sense. The next blue line down is Little Green Pharma. So as we look through the Little Green Pharma, ECS, Cann Group, Althea, Vitura, and Bioxyne and Botanix, we can see that it has certainly been -- whilst we're constantly striving to drive share price growth and where -- as a Board and as an executive and as a leadership team, that is an absolute focus on shareholder return. When we look across the year as our -- with our competitors, we can see it has been a tough market, but we can see that we have been performing really well. Thanks, David. The next slide is an interesting one. I'll just sort of touch on this and refer back to what I mentioned at the start around the U.S. down scheduling. So this particular slide here shows the blue graph shows the Little Green Pharma share price over about 5 years back to January 2021. And the orange and purple show the ETFs, the cannabis indexes out of North America. And so what you'll see back in late or early 2021 was this really rapid rise of share price inside the North American markets. We followed that slightly after. So there was a bit of a lag towards that. And then we tended to just follow and track that -- those indexes all the way down over that 5-year period of time. Now there is no rhyme or reason why that has been the case, but the reality is the global markets have looked at looked at our industry and our share price, and it has matched. We see a little bit of a blip this year where we've managed to maintain some flat line growth while the ETFs in North America have dropped off a little bit. But you'll notice if we zoom in and we won't do that, but if you zoom right into July 2025 at the end of the cannabis index there that there's been an increase for the North American indexes. And that really was the news a couple of weeks ago that the breaking news that the U.S. may be looking to down schedule in the near term. Now we have heard this before, and it hasn't quite happened and who really knows what Trump's plans are. But you can see that even on potential news that there will be a reaction to the market, to the North American market. So what that specifically means for us, we do believe that there will be a bit of a lag. But what it means globally is that there'll be more access to capital in these markets. At the moment, it's federally illegal in the U.S. So once that becomes legal in the U.S. for medical, there will be more capital available in the market. And that will have an impact -- a positive impact on stocks inside that market. And most of those U.S. multistate operators and even some of the bigger Canadian operators they are poised for global growth. So we are in conversation with a lot of those companies, and we know for a fact that they're looking for a re-rating, they're looking for capital and they're looking for global expansion. So we are such a logical target for those companies when we see a re-rating in their market. And even broadly at an index level, we believe that we should have a positive re-rating when that happens as well. So that is part of where we think is the significance of this next year, and we do believe that's getting much closer. Thanks, David. Not a huge change over the last financial year on this slide other than TIGA Trading, which is Thorney Investments, really further supporting the business and taking a bigger stake in the business since last year, purchasing a large chunk from Hancock Prospecting. So currently sitting at 19.7% and very supportive shareholder of the company and outside of that, a similar ownership across our top 20 shareholders and Board ownership, which is, as I've mentioned many times, is mission critical for ensuring that the -- our executive and our Board are focused on shareholder return, which is really what we're all chasing. So very well aligned. Thanks, David. And lastly, on this slide, I think just touching on the summary of the value proposition for us at Little Green Pharma. Sorry, I just lost the slide there. We do believe that we're very well positioned in Australia and Europe. The brand has rapidly grown over the last 12 months. The French opportunity will be significant, and we believe that we could be in a position in the next 12 months where this Danish asset is really poised to become a really interesting shift for us. We mentioned that there's a regulatory change coming next year. And so what that will enable us to do up in Denmark. Previously, we could only cultivate and grow an export. Now what we'll be able to is actually import, process and export as a hub for Europe. And so we think there's quite a significant opportunity to slightly pivot what we're doing and offer a service to the European market. So we're pretty busy as a company looking at how we can capitalize on that. And I think we are in a strong position. We're in a unique position as a company given our NTA position, given our low debt position, given our finance position. And as I started this meeting, I genuinely believe this market is poised for a big change. And I now more than ever believe that Little Green Pharma is globally the best positioned to capitalize on that. And I truly believe that the next 12 months will be pivotal for all of us as shareholders. So that's the end of my presentation. Thank you again for joining today. And I believe, David, we're going to jump on to some Q&A.

Thanks, Paul. Great presentation. We do have a number of questions, a number were submitted prior to the meeting. So we'll jump straight into them. Is the company currently cash-constrained?

No, I don't think we are. No. I think as I've mentioned in the presentation, well, in the June quarter, we had cash receipts of $12 million, which is a record. We had a positive operating cash flow of $0.5 million. We've got $5 million of unused financing facility. So no, I think as per the presentation, I think we are in a very strong position for the market.

And what about the sustainability of profitability given the noncash items?

Yes. So certainly, in the financial year, profitability was supported by -- was some one-off tax factors, which obviously won't be repeated. But I think if you look at the underlying drivers of what got us to that result, it was the economies of scale of significant volume, stable overheads. We've managed to keep those overheads stable now for a long period of time, which drives down our margin and really the growth we've seen at the top line of the business will continue to grow and deliver those results and strong margins. So we think outside of the one-off tax factors, we think they're sustainable moving forward, absolutely.

Now you touched a lot on Germany. How material is that market? And are you seeing a shift of the markets in terms of where the growth and profitability is coming from?

Very material, the German market for us, yes. So as I mentioned, the tonnage we've seen into that market is -- has been significant on more of a holistic scale. And then for us, we -- just in the last quarter, we had a 70% increase or roughly a 70% increase in volume into the German market. So yes, no, we really believe that the German market is material to us. We did launch -- I didn't mention that, I briefly mentioned that, but we did actually launch our own brand, which is our CherryCo label that we had in Australia, we launched into the German market at a big conference called Mary Jane just several months ago. And within the first couple of months, we've exceeded expectations on volume under our own brand. We believe that, that is really significant for the long term. I think we expect to see continued growth, and we still think there's a significant opportunity inside that German market for significant growth. But like all markets, you'll see growth and you'll see a bit of a flattening off. So we firmly believe in the power of our own brand. So it's -- we have spent a lot of time focusing on that, finding a spot in the market and trying to drive maximum volumes there. And at the moment, it's only a small percentage because it's been a few months in the market. But over time, we expect that to continue to grow.

A question here in relation to Health House. You did touch on it during your presentation. But why is Health House important to the Little Green Pharma business? And how is integration going?

Yes. Integration is completed. We're 6 months in, and the business is adding value. I think the broader consolidation question for this industry now is one that is constant. And one in which we are actively talking to the market and actively in many discussions. And so we believe that we're very well positioned to do that. I think the acquisition of the Danish side a number of years ago, the acquisition of Health House has shown to the market that we can integrate businesses well. And that is part of the risk in when we see consolidation and acquisition. So now the Health House acquisition has been -- I wouldn't say seamless, but probably not far off. And we knew that business well, we knew that culture. We knew their values. So it was relatively easy for us. And I think distributing through that brand already made it simple and the economics of that opportunity meant that even through our own distribution, it would make commercial sense. But what we've actually found there was obviously some hesitation. Multiple brands work with Health House is that 30 brands when we started 25. So there was potentially a hesitation that brands that work with Health House may see us as competitive and therefore, move away from Health House. In fact, we've probably seen the opposite. We've got a really trusted brand in the market. We've seen a number of brands actually come to us and want to work with us and the number of brands grow. So there's some pretty exciting growth opportunities for Health House. And whilst it's not growing in big double-digit numbers month-on-month, it is growing. It is very well positioned. And there's going to be some interesting news flow on opportunities, I believe, in this next year for Health House.

Quite a knowledgeable question. How is LGP positioned to take advantage of the permanent Danish framework commencing 1 January 2026...

Yes. So I think I mentioned in just towards the end of that slide, we -- at the moment, we've only been able to just cultivate and to export. So what this will enable us to do is actually to import product and actually provide like a contract manufacturing service to pack release and distribute into the European market. And to give you a bit of a guide, I mean, some of that was happening out of Portugal, very, very expensive on a cost per gram, like very expensive, double the Australian market. And that has been clamped down that sort of greenwashing that we've seen out of there. So we actually think that we've automated a lot of our -- the post-production part of our business, particularly the packing line. So we think there's quite a significant and interesting opportunity. We're already in discussion with a few groups that would be interested to do that. We're still really unpacking what that legislation will look like to come up with a plan for next year. But yes, we're pretty excited about that opportunity for sure. And it will create a bit of a -- enable us to create a bit of a hub, a European hub for other brands to say, can we send bulk product to you and can you pack it off and release it into, in particular, the German market.

Now this question may be a little bit redundant, so I apologize. But has there been any thought given to leasing out any of the excess space you have in the Danish facility?

Look, there has been -- there certainly has been some interest I don't think it's outside the realm of possibility if we see the growth that we've seen over the last year that we don't have a huge amount of space to be giving in the next year or 2. So we're pretty cautious. The benefit of having that site, the investment made in that site, the previous owner spent, I think, as I mentioned before, $120-odd million in building that site. So the CapEx doesn't kind of sit with us. So having a bit of redundant space is not necessarily an issue. There are significant factors in subleasing medicinal cannabis sites, given the scheduling of cannabis as a narcotic. So it's not a simple process like you just lease out part of a warehouse. It's pretty difficult. And therefore, if you're going to do that and work with a third party, you're looking at really long -- they're looking at long, long, long term. They want 3, 4, 5-plus years to work out of there. And I'm pretty convinced in our pathway that we'll be utilizing that site well inside those time frames. So there's certainly been a discussion, but I think where we sit here today, probably quite unlikely.

Looks like one of the last questions. Could you provide any thoughts on the cut-through competition seen recently in the Australian medicinal cannabis market, in particular, and our loss of budget brand market share of 35% of cheaper competitive products? Do you see this trend slowing or reversing? Or is it the case that as a large listed company carrying a lot of corporate overheads that our niche will perhaps always remain as a higher price point premium product participant in the market? Or can our budget brands be competitive with non-listed smaller competitors?

Sounded like a competitor question there, David. Yes, no doubt. I mean the entire market, whether it's a budget market or a premium market or a mid-tier market is competitive in the Australian market. We sit across all of those markets. We launched the CherryCo brand over a year ago. We had significant success in growth in the first sort of 6 to 12 months. That certainly has come off a bit. You would have seen that in our quarterly, but we had a bit of a resurgence in there. When we entered the budget market originally, we -- there was only a handful, maybe half a dozen products sort of in that budget range. There's now well north of 50 to 100. And so yes, it's competitive. So we saw a little bump. We're not necessarily chasing to the bottom, but we are on the budget end of where we're looking at. We are certainly looking at pathways to capture the budget end that's got a good commercial mindset to ensuring margin on the way through or limiting our risk in terms of inventory. So we're certainly looking at that. We believe we're getting to a really competitive position out of Denmark. The Busselton site won't touch the budget market at all. That will only sit in the craft end of the market. So we're talking retail up at the $12-plus, $12, $13. And we're seeing off a relatively low base, but we're seeing some really good growth out of that site. And with only a tonne capacity, we think that, that will position quite well. Look, I think -- I certainly wouldn't say I think we've seen the bottom of the market in terms of the volume of brands entering the market. It does feel a little bit like every time one drops out to join. But ultimately, I think I do believe this market will consolidate. And I think like if we just forget about cannabis for a minute and think what does consolidation look like in any other market where you have this kind of start-up and shakeout and consolidation, you end up with a handful of brands that have a high percentage of the market. And we're in discussion. We're getting calls perhaps on the shoulder from industry saying, hey, we think consolidation is coming, should we have a conversation. So those types of things are happening all the time. And so yes, we're in a competitive space. Yes, we need to think laterally on how we continue to compete across each of those categories. Yes, there's more competition in the market, but we think we've done a really good job as that has scaled up, and we've got -- we think we've got a very good strategy to continue to have a position there, and we think consolidation will play a key role. So well positioned.

Thanks, Paul. That does bring to an end all the questions. We don't have any more. No more have come in. If people do have questions, Paul and the Little Green Pharma team are always happy to answer them. So please direct them post this meeting. On behalf of myself, thanks, everyone, for attending, but also thanks to the Board and advisers for the work they've done over the course of this year, but for attending today. And thanks also to all of the presenters -- sorry, all of the attendees who joined in and the shareholders who participated today. That does bring the meeting formally to a close. So I'd like to thank everyone and have a great day.

Thanks, David. Thanks, everyone.