Wellnex Life sales slide as it sharpens strategic focus
By Josh White
Date: Monday 20 Oct 2025
(Sharecast News) - Wellnex Life said on Monday that it has started implementing a sharper strategic focus built around its Pain Away consumer health brand and contract manufacturing operations, while confirming plans to exit the medicinal cannabis market following an internal business review.
The ASX and AIM-listed company reported quarterly sales of AUD 5.4m (£2.61m) for the three months ended 30 September, down 18.2% from the previous quarter due mainly to delayed IP licensing revenue, which was now expected to be received in coming months.
Brand sales rose 4.1% over the period, with gross profit of AUD 1.8m representing a margin of 35.2%.
Cash receipts were AUD 4.5m, while the company recorded a net operating cash outflow of AUD 2.9m.
Wellnex said it secured new debt facilities totalling up to AUD 5.35m, of which AUD 4.1m had been drawn by the quarter's end. Borrowings included funding from Reach Wholesale and Scottish Pacific Business Finance, with repayments of AUD 3.5m made on the latter.
The company also received approval for its 2023 R&D tax credit.
During the quarter, Wellnex launched a full review of its cost base and portfolio, identifying operational efficiencies and initiating a process to divest its underperforming medicinal cannabis segment.
The company said the cannabis business contributed less than 1% of group revenue in the 2025 financial year, adding that its closure would not have a material financial impact.
Executive chairman Ash Vesali said the changes form part of a new two-pillar framework designed to deliver profitable growth and restore shareholder confidence.
"Our business is now structured around two distinct value creation pillars," he said.
"The first focuses on accelerating growth of Pain Away, our category-leading brand with strong domestic momentum and significant international potential.
"The second is the continued expansion of our contract manufacturing operations, where we hold supply agreements with leading pharmaceutical partners such as Haleon, providing recurring revenue and cash flow stability."
Vesali said Wellnex was transitioning to a leaner, more agile operating model, with a targeted cost reduction programme expected to deliver over AUD 1m in annualised savings, part of which would be realised during the 2026 period.
"Aligned with our refined strategic focus, Wellnex is transitioning to a management framework enabling efficient decision-making and disciplined capital management," he said.
"This programme will strengthen our margin profile and position the business to deliver sustained positive cashflow and profit within the near future term."
He added that Wellnex would continue consolidating underperforming brands while investing in areas with clear competitive advantages.
"We are entering a new chapter and the board's focus is firmly on execution of this strategy and delivering measurable financial results," Vesali said.
"I see it as my responsibility to ensure we build investor confidence and deliver value."
At 0938 BST, shares in Wellnex Life were down 9.7% at 13p.
Reporting by Josh White for Sharecast.com.
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