Annual Report to Shareholders
The 2018 financial year was a significant year of transformation for MMJ.
With MMJ shareholder approval on 28 September 2018, the company will complete its transformation from being an owner-operator of Harvest One and PhytoTech Therapeutics into a Listed Investment Company ("LIC"), owning minority stakes in Harvest One and eight (8) other businesses within an investment portfolio as a global cannabis investment company, with the new name "MMJ Group Holdings Limited".
The Board made the important decision to change the company into an LIC so that it could directly leverage the skills and capabilities of the Board and management team in the best way possible to optimise risk-adjusted returns over both the short and long term. By holding a number of minority investments in what is a global, emerging and rapidly growing sector, MMJ is now well-placed to respond to, and capitalise on, significant changes as the sector expands then matures and ultimately consolidates through mergers and acquisitions activity.
Consistent with this renewed focus, the Board recruited a new Chief Executive, Jason Conroy, in February 2018 to lead this change. He has since been very active on the investment front and has expanded our portfolio and network of global cannabis community relationships in a relatively short period of time. In April 2018 he recruited an experienced CFO, Jim Hallam. The Board believes that our new executive team has the focus, skills and desire to drive higher shareholder returns through 2019 and beyond.
Whilst the Board has been disappointed by MMJ's share price performance through the course of this calendar year, largely reflecting a similar decline in the share price of our largest investment (by value of invested capital), Harvest One, we are very excited by the outlook of the company as all of its investments, most of which were made in the past six months, are well positioned to participate in the significant growth expected in each of their market segments. Notably, and most importantly, Harvest One is in the early stages of a turnaround with the recent appointment of their new Chief Executive, Grant Froese, in July 2018.
Key measures of future performance for MMJ will be our share price, net tangible assets ("NTA") per share, along with the multiple on invested capital, or "MOIC", that we can achieve from our investment portfolio. We are focused on generating a 2-3x portfolio MOIC over the next 12 months and, if we can achieve that, it will be a strong performance for our shareholders.
I would like to take this opportunity to thank our shareholders for their support over the past 12 months. The Board appreciates your loyalty and support and we remain committed to delivering value for all shareholders.
Finally, I also want to thank our new executive team for their focus and effort in completing the heavy lifting required to transform MMJ into an LIC with an exciting future.
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About MMJ PhytoTech Ltd
MMJ PhytoTech Limited (ASX:MMJ) is a global cannabis investment company. MMJ owns a portfolio of minority investments and aims to invest across the full range of emerging cannabis-related sectors including healthcare, technology, infrastructure, logistics, processing, cultivation, equipment and retail. For MMJ's latest investor presentation and news, please visit: http://www.mmjphytotech.com.au/investors/
MMJ PhytoTech Ltd