This follows on quite well from my post in July.

I had an informative chat with Andrew Waters CFO yesterday. I wanted to know the implications of no deal Brexit on the biz. VLG manufactures its products in its factory in Italy and has clients in the UK and worldwide. Only UK clients (Boots, Sainsbury, Amazon Asda, Morrisons, Lloyds) might be affected. To mitigate this possibility 6 months worth of inventory are being sent to VLG UK warehouse. Beyond that VLG has 3rd party manufacturers if required. International clients (Europe and China) are not affected as they collect from factory gates in Italy so items never touch UK. (payments terms are on collection).

VLG has had a great run this year and continues to perform well. Andrew says VLG are nicely on track to achieve analyst projections of £30m rev and adjusted EBITDA of £6m, that they are banking a lot of orders for Q1, there is good momentum at present and this will continue. He talked of good growth and traction. Profitability is 20% of net sales and VLG has now reached critical mass. Ops margin now low 20's and operational leverage starting to show. 75% of EBITDA is free cash flow.

The strategy is to grow Brand sales by product and in more territories - some brands are Dentyl, Ultradex, Pharmsource. Products are toothpaste, mouthwash, women's products, nail fungal products and more. VLG also manufactures products for other pharma companies. Targets are 10% organic growth / year and 10% / year by acquisition.

VLG share price has had an impressive gain this year and it may appear to be a Covid stock. It sells hand sanitiser which may be the reason. Sales for this product were £3.5 million (total rev IRO £30m) this year and next year's figures include a projection of only £1 million hand sanitiser. Otherwise its products are not C19 beneficiaries. There is a hypothesis that its Dentyl mouthwash may give some protection against SARS2 virus and there are 2 studies at Cardiff University looking into this, but this is not part of VLG forecasts or figures. There is a small chance this might prove beneficial to Dentyl sales in the future as mouthwash may become part of the toolkit to protect against viruses. Another example: the dentist could request that you use mouthwash at the start of your consultation. The result of the…

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