Morning all,

Things I've noticed today:

Venture Life (LON:VLG)

  • Share price: 47.8p (+3.5%)
  • No. of Shares: 84 million
  • Market cap: £40 million

Trading update

We covered this when it did a £19 million placing last month, to acquire Dentyl mouthwash and generally strengthen the company.

It already has the UltraDEX mouthwash brand.

We have 6% organic revenue growth in H1 to £8.3 million and a full-year outlook in line with expectations.

The order book is up 20%. I'm not sure how much to read into that  - we don't know how long it will take to realise these revenues. Still good news, though.

UltraDEX is entering Spain, Portugal and Belgium from Q4 2018 and is set to enter Austria and the U.A.E by Q1 2019. The total number of markets where the brand will be "partnered" is set to double from 15 to 30 by the end of 2020.

My view

I wish there were fewer moving parts, as a little bit of guesswork and maths is required to figure out what is going to happen next. We have UltraDEX and Dentyl now and will probably soon have more acquisitions. It's impossible to have much of a clue about whether a future acquisition will work out or not.

Using back of the envelope figures, I think VLG might have c. £10 million of cash left from the placing, after paying down debt and buying Dentyl.

So let's estimate the current enterprise value at £30 million (market cap £40 million minus £10 million cash).

  • UltraDEX made operating profit of £600k last year and this is presumably going to show a nice increase.
  • Dentyl made PBT of £1.2 million. This has been trending lower but of course VLG's plan will be to turn this around.

If you think about what the combined operating profit of these mouthwash brands could be and…

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