REG - Venture Life Group - Half-year Report
22/09/2022 07:00
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RNS Number : 2287A Venture Life Group PLC 22 September 2022
22 September 2022
VENTURE LIFE GROUP PLC
("Venture Life", "VLG" or the "Group")
Unaudited interim results for the six months ended 30 June 2022
Strong trading in H1 demonstrating resilience of model and continued
confidence in full year outlook
Venture Life Group plc (AIM: VLG), a leader in developing, manufacturing and
commercialising products for the self-care market, presents its unaudited
interim results for the six months ended 30 June 2022.
Financial Highlights
· Revenue growth of +36% to £18.9 million (2021: £13.9 million)
· Gross profit margin increased +55% to £7.7 million (2021: £4.9
million), gross margin percentage increased 5.0 percentage points to 40.6%
(2021: 35.6%)
· Adjusted EBITDA1 increased +74% to £3.3million (2021: £1.9
million), Adjusted EBITDA(1) margin increased to 17.6% (2021: 14.0%)
· Operating profit £0.4 million (2021: loss of £0.2 million)
· Profit before tax, amortisation and exceptional items £1.7
million (2021: £1.3 million)
· Adjusted earnings per share2 1.43p (2021: 0.83p), Basic earnings
per share (0.18)p (2021: (0.37)p
· Cash generated by operating activities of £1.8 million (2021:
outflow £(0.6) million)
Commercial Highlights
· Significant organic revenue growth delivered within the recent
acquisitions of BBIH and HICP at 10.2% and 5.5% respectively, representing an
overall combined growth of 9.5% from these acquisitions (on a pro-forma(3)
basis)
· Six new deals signed, including new distribution partners for
Pomi-T in The Netherlands and Singapore plus an additional partner for the
Lift brand in Ireland.
· Three in-market product launches through existing blue-chip
partners, including key launch in Brazil for BV treatment
· Increased distribution achieved in Asda (Balance Activ), wilko
(Dentyl) and B&M (Dentyl)
Post period end
· Trading in line with management expectations and order book is
c30% ahead of the same time last year on a like for like basis (excl. H1'23
orders)
· A new five year distribution agreement completed on Balance Activ
in Austria
· Seven new in-market international product launches
1 Adjusted EBITDA is EBITDA before deduction of exceptional items (see note 6)
and share based payments (see note 15 for reconciliation)
2 Adjusted earnings per share is profit after tax excluding amortisation,
exceptional items (see note 6) and share-based payments
3 Pro-forma basis i.e. if the acquisitions had been in place for all of the
prior year
Jerry Randall, CEO of Venture Life Group plc commented: "I am pleased to
report these strong trading figures in the context of the challenging economic
and trading environment we are currently experiencing and demonstrates the
resilience of our business model in the face of these headwinds. I
congratulate the whole Venture Life team for their outstanding agility,
tenacity and commitment in this first half. The acquisitions we made in 2021
are now fully integrated into the business and have delivered growth as
expected in the first half of the year, and have contributed to our improved
gross margin percentage. Whilst operating cash conversion (before working
capital movements) has been high (94% of adjusted EBITDA(1)), we have
continued to invest in inventory to ensure we can supply our customers. The
supply chain challenges experienced in 2021 have continued into 2022, in terms
of both cost and availability, particularly impacted by the significant
increase in energy prices. The support from our customers accepting the price
increases that we have put through during the first half of the year has gone
some way to mitigating the supply side cost increases. We have encouraged
customers to order further ahead in order that we can guarantee supply, and I
thank our customers for their proactivity in this. There is no doubt that the
coming 12 months will continue to present challenges in the uncertain and
volatile global environment, but it also provides opportunities for us,
including the Group receiving many inbound enquiries from both existing and
new customers who have been let down by their current suppliers, unable to
supply in this challenging environment. We have traded well in the first half
of the year, and the second half continues to progress in line with our
expectations, and whilst we all face uncertainties on the coming months, the
Group expects to deliver full year revenue and adjusted EBITDA(1) in line with
market expectations."
For further information, please contact:
Venture Life Group PLC +44 (0) 1344 578004
Jerry Randall, Chief Executive Officer
Daniel Wells, Chief Financial Officer
Cenkos Securities plc (Nomad and Joint Broker) +44 (0) 20 7397 8900
Michael Johnson / Russell Kerr (Sales)
Stephen Keys / Camilla Hume (Corporate Finance)
Singer Capital Markets (Joint Broker) +44 (0) 20 7496 3000
Jonathan Dighe (Sales)
Shaun Dobson / Alaina Wong (Corporate Finance)
About Venture Life (www.venture-life.com (http://www.venture-life.com/) )
Venture Life is an international consumer self-care company focused on
developing, manufacturing and commercialising products for the global
self-care market. With operations in the UK, Italy, The Netherlands and
Sweden, the Group's product portfolio includes some key products such as the
UltraDEX and Dentyl oral care product ranges, the Balance Active range in the
area of women's intimate healthcare, the Lift and Glucogel product ranges for
hypoglycaemia, Gelclair and Pomi-T for oncology support, products for fungal
infections and proctology, and dermo-cosmetics for addressing the signs of
ageing. Its products are sold in over 90 countries worldwide.
The products, which are typically recommended by pharmacists or healthcare
practitioners, are available primarily through pharmacies and grocery
multiples. In the UK and The Netherlands these are supplied direct by the
company to retailers, elsewhere they are supplied by the Group's international
distribution partners.
Through its two Development & Manufacturing operations in Italy and
Sweden, the Group also provides development and manufacturing services to
companies in the medical devices and cosmetic sectors.
Non-Executive Chair's Statement
The Group has seen continued momentum from the second half of last year,
delivering strong first half growth in revenue, gross margin and adjusted
EBITDA(1) against the comparative period not withstanding ongoing disruption
within the supply chain. We are thankful for our exceptional people across our
UK, Italy, Sweden and The Netherlands businesses, being proactive in meeting
the challenges and the support of our customers. Whilst challenges remain,
there are signs that these have now plateaued and are becoming more
manageable.
The acquisitions of BBI Healthcare (BBIH) on 4 June 2021 and Helsinn (HICP) on
6 August 2021 are strong brands enabling value creation; they are continuing
to perform well and have proven to be valuable additions to the Group which
have both delivered first half growth and positively impacted gross margins,
and we are confident in their continued growth.
Our principal manufacturing site of Biokosmes has met the increased customer
demand, integrated our new acquisitions extremely well and demonstrated
consistency in this higher output with capacity still available to continue
our growth ambitions.
The combination of strength of our order book to date and investment in
inventory to secure the delivery of it underpins our confidence in delivering
full year results in line with market expectations.
The Group still has a significant level of undeployed funds from the Revolving
Credit Facility that was put in place in June 2021, and we are continuing to
actively review a number of brands with strong growth potential that could
make use of this facility and build on the strong acquisitions already made.
Paul McGreevy
Non-executive Chair
22 September 2022
Chief Executive Officer's Statement
Operating review
The Group delivered an overall 36% growth in revenues to £18.9 million (2021:
£13.9 million) in the first half. On a pro-forma basis, which assumes the
acquisitions had been in place for all of the comparative period, overall
Group revenues have increased £0.3m or 1.7% compared to the same period last
year.
The recent acquisitions of BBIH and HICP contributed a significant £6.3
million to first half revenues and achieved growth of 9.5% over the same
period last year on a pro-forma basis i.e. if the acquisitions had been in
place since the start of the year.
Outside of these acquisitions, performance of the legacy revenues were akin H1
with 2021 at £12.6 million (H1 2021: £12.8 million). This revenue reflected
growth of £0.4m / 4.6% in the customer brands business, offset by lower
revenues in the VLG legacy brands of £0.6m / 14.3% in this first half as a
result of lower international sales which will be more weighted towards the
second half than in previous year. VLG legacy brands in the UK were broadly in
line with the previous year.
The Group comprises two segments: Venture Life Brands and Customer Brands
which respectively accounted for 52.8% and 47.2% of first half revenues.
The Venture Life Brands business reported revenues of £10.0 million (H1 2021:
reported £4.9 million). The revenue increase of £5.1 million on a reported
basis has been driven by the impact of the recent acquisitions which
contributed an incremental £5.7 million during the period, offset partially
by a decline in the legacy business of £0.6 million. On a pro-forma basis
these brands held flat year on year (H1 2021: pro-forma £10.0 million).
The Customer Brands business reported first half revenues of £8.9 million, an
increase of £0.4m / 4.6% over the previous year. As well as developing and
manufacturing the majority of the Venture Life brands, this part of the
business is also focused on the development and manufacture of products on
behalf of third parties, sold under their brands.
In line with the Group's M&A strategy, the growth of the higher margin VLG
Brands exceed that of our Customer Brands and has driven upwards the overall
revenue contribution from our VLG Brands and in turn driven continued
improvement in gross margin against the comparative H1 period. We expect this
to increase going forward through organic growth and as the Group continues to
explore selective brand acquisitions.
First half absolute Gross margin of £7.7 million increased £2.7 million /
55% over the previous year (H1 2021: £4.9 million) and delivered a
significant gross margin percentage improvement of 5.0% to 40.6% (H1 2021:
35.6%). The positive step-up in gross margin percentage has been driven by the
newly acquired brands of 6.2%, offset partially by an adverse 0.3% impact from
further cost increases (net of customer price increase VLG has passed on) and
an adverse product mix impact of 0.9% on the legacy business due to a higher
proportion of revenues coming from lower margin customer brands than compared
with the prior year.
The increased supply prices and transport costs have been widely reported
globally and we have not been immune to this. We experienced these issues in
2021 and they are persisting in 2022. There are challenges around price,
availability and delivery lead times of raw materials and packaging, that our
team must manage daily. Significant increased energy prices affect operational
costs and supplier component and material costs, with inflationary pressure
and logistic challenges. The Group has continued to use mitigation strategies,
passing on price increases where possible, securing continuity of supply and
fixing prices within the supply base as well as sourcing alternative
suppliers.
The Group generated adjusted EBITDA(1) of £3.3 million for the year (2021:
£1.9 million), an increase of 71.4% over the previous year and delivered an
Adjusted EBITDA(1) margin of 17.6% (H1 2021: 14.0%). Operating profit
increased to £0.4 million (2021: Operating loss £ (0.2) million), an
increase of £0.6 million against the comparative period.
Venture Life Group (VLG) Brands
Across the VLG Brands portfolio, since the beginning of the year there have
been six new deals signed with our international partners including new
partnerships in Germany, Netherlands and Singapore for Pomi-T, an additional
partner for the Lift brand in Ireland and the deal with our new Chinese
partner for oral care which was announced earlier this year. The online
business has also been expanded into Germany with Balance Activ which launched
in Q2 2022.
There have been three new in-market product launches by our partners in
various countries including the launch of BV treatment in Brazil which was a
key opportunity identified from the BBIH acquisition, and a further seven new
launches that happened post period end.
Oral Care - UltraDEX and Dentyl
Overall oral care revenues fell 8% to £2.2 million (H1 2021: £2.4 million)
through difficult market conditions in which the mouthwash category has seen a
downturn and whilst a risk may persist for discretionary spend in this area,
we feel that both brands are well positioned and well distributed within the
market to weather any present or future challenges.
For Dentyl there was growth in sales through the value retailers with wilko,
Savers and Home Bargains although this was offset by a weaker performance in
grocery as consumers continue to migrate to the value retail channels as per
recent market data (source: Nielsen). We believe that with our broad
distribution base on Dentyl, the growth seen in value retailers and new
launches into B&M that went live at the end of Q2, we are well placed to
mitigate any downturn in this category resulting from changes in consumer
discretionary spend at this time.
Within the international space, the launch of Dentyl in China through our new
partner Samarkand plc was delayed by three months due to widespread lockdowns
and although the goods have commenced selling in the local market, continued
lockdowns remain a challenge. The development of these brands in this market
will be monitored closely.
Looking forward, we are expecting a premium grocer to launch both Dentyl and
UltraDex into their stores in Q4 of this year. We remain confident that with
increased usage occasions coming through the latest data, coupled with the
impact of distribution gains and increased range offered online, we will see a
recovery in the second half revenue performance from these brands.
Women's Intimate Health - Balance Activ
On a global basis, Balance Activ delivered first half revenues of £2.2
million (H1 2021: pro-forma £2.5 million) a reduction of 9.4% versus the
prior year. The performance against the comparative period has been adversely
impacted by the conflict between Russia and the Ukraine which resulted in
revenue loss from the local distributor, further, revenues from the newly
developed fertility gel product which were included in the prior year
pro-forma have not repeated. Stripping out these adverse impacts, the Balance
Activ brand has delivered growth of 5% on the rest of the business.
In the previous year, this brand grew 33% in the UK which had been driven
mostly by the annualization (full year impact) of Amazon sales. Our teams have
leveraged this online success and used it as a platform to target new
distribution opportunities in the UK, with a major pharmacy chain confirming
the listing of Balance Activ NPD later this year. We have also increased the
range offered through online channels in UK and launched the brand online in
Germany in Q2 2022. Due to these factors, we expect to see revenue growth in
the second half of the year from the retail side of this business.
Outside the UK, Balance Activ is currently launched in 26 countries with its
largest partner, from which we expect to see good growth over 2021 based on
revenues to date and orders in hand. In July 2021, the BV gel received
registration approval in Brazil from ANVISA, its regulatory body and the
product will launch in H2 2022, the first shipment to this market was
completed in Q1 2022. In total, there have been three in-market launches for
this product in the first six months of 2022, and six new launches post term.
With the initiatives already undertaken in the UK, coupled with very visible
second half revenues from our international partners, we expect to see a good
out-turn for the rest of this year for this brand.
Diabetes Management - Glucogel and Lift
Last year we acquired two brands within the diabetic management category -
Glucogel and Lift. On a proforma basis, revenue for both brands collectively
grew by 28.9% to £3.2 million (H1 2021: £2.5 million), driven by Lift, which
is performing well across all channels. The brand is performing particularly
well online due to increased traffic and has seen higher brand loyalty
compared to its competition in this space.
In addition, Glucogel remains as the number 1 prescribed product for treating
hypoglycaemia and is positioned towards more serious attacks. Revenues grew by
0.2% in the first half of 2022 on a proforma basis to £1.1 million. These
revenues are protected by equalization deals in place with key pharmacies and,
as such, we expect the business to remain steady moving forward through the
year.
Oncology Support - Gelclair, Pomi-T & Xonrid
On a proforma basis, revenues grew by 5% to £0.9 million (H1 2021: £0.8
million). Prior to the acquisition of these brands, opportunities had been
identified in key target markets and we have made commercial progress with new
partnerships signed for Pomi-T in Germany, The Netherlands and Singapore. In
addition, advanced discussions are ongoing for Gelclair in USA, Brazil and
Canada.
Nail & Foot Care Portfolio
Revenues for the first half were £0.9 million (H1 2021: £1.5 million). In
The Netherlands, these products have delivered growth against the comparative
period and the UK has remained flat. However, the international side of this
business was impacted by the loss of a key distribution partner, and we are
currently seeking new opportunities to replace these revenues. However, second
half revenues are set to be significantly stronger and are underpinned by our
order book.
Customer Brands
Revenues from Customer Brands increased by 5% to £8.9 million (H1 2021: £8.5
million) with growth coming from good performance of existing partners and new
business gaining traction with key partners. The impact of customer stocking
and destocking seen in the previous couple of years has levelled out and in
turn we have seen customer ordering return to more normalised patterns.
The Group has been able to leverage selected appropriate opportunities where
other third-party manufacturers have failed to deliver. This is an opportunity
that has been presented by the challenging economic climate and increased
regulation throughout the industry, as more customers look for a reliable
manufacturer and supplier.
Revolving Credit Facility (RCF)
Last year, the Group obtained a RCF with its main bank, Santander Group,
alongside Silicon Valley Bank for £30 million draw with an accordion facility
for a further £20 million subject to the banks' ratification.
At 30 June 2022, the Group has drawn net £8.5 million (Dec-21: £8.5m), which
has been used to pay down all other debt in the Group and the first payment
for HICP. If it had not been for a significant inventory build through the
first half of 2022 as security against issues from the global supply chain, we
would have seen the facility reduce through cash generation.
The facility was called upon to make the second and final payment in relation
to the acquisition of HICP in August 2022 and we expect the overall amount
drawn to come back in line with the end of June 2022 level of drawdown by end
of the year, before any further acquisitions.
We put the facility in place to utilise the cash generative nature of the
business to help fund future acquisitions without the dilutive effect of an
equity raise. The Group is continuing to actively review a number of
immediately earnings enhancing acquisitions that it could make utilising this
facility.
Focus on Sustainability
As a business we undertake many initiatives towards our goal of becoming a
more trusted, responsible and sustainable business. Following the formation of
an ESG Committee at the end of last year, we have been focused on developing
our drive towards increased sustainability. The committee includes members
from the Group Board and employees from the business, and it engages with all
key stakeholders in this process - our aim is to become a trusted, responsible
and sustainable business.
Our 5-step approach:
· Develop our ESG leadership team from a diverse and accurate
representation of our stakeholders - achieved Q4 2021.
· Consult with stakeholders to align expectations in being a
trusted, responsible and sustainable business - achieved Q2 2022.
· Use results of stakeholder consultation to identify our priority
goals and ensure alignment to the SDGs - achieved Q3 2022.
· Create our KPIs, their baseline and measurement methods against
which to track progress - targeted for Q4 2022.
· Regular reporting and transparency of progress to all our
stakeholders in the future.
Good progress against our sustainability development goals has been made so
far in 2022, with the company achieving the Bronze Sustainability Rating from
Ecovadis for Biokosmes SRL, Italy, as well as completion of the stakeholder
consultation in Q2 2022. We look forward to engaging with and informing all
our stakeholders on our further progress against these objectives in the
future.
Summary & Outlook
The Group is delivering on its M&A strategy which has driven a significant
revenue and earnings improvement during the first half following the two
acquisitions made in the previous year. The newly enlarged Group has seen
momentum from the second half of last year continue into 2022 with revenue,
gross margin and adjusted EBITDA(1) improvement being achieved against the
comparative period.
The start to the second half of the year has been very encouraging, with the
current order book significantly ahead of the same time last year and revenue
performing slightly ahead of management's expectations at this time. The
strong order book reflects growth in the underlying business plus the effect
of customers proactively ordering further forward to help manage supply chain
disruption and secure stock, which gives us greater visibility of revenues and
confidence that the Group remains on track to deliver in line with current
market expectations.
Further commercial progress has been made since the period end, including new
distribution gains and expansion of existing distribution in the UK, as well
as advanced discussions ongoing with potential new distribution partners.
The supply chain issues experienced in the previous year appear to have
plateaued, however, we are appreciative of our customers supporting cost
increases, whilst where possible mitigating further price impact on input
costs. The level of supply chain disruption cannot be underestimated, and I am
delighted with the work performed by our teams to pro-actively manage the
situation and react to the needs of the business. The progress in the first
half of the year is now being built on with a very much larger order book than
the same time last year, which gives us good confidence in delivering higher
H2 revenues as expected.
The acquisitions made in the prior year introduced margin accretive brands
with high growth potential in new therapy areas and have diversified the
Group, reducing potential impacts of discretionary spends in the current
economic climate as well as adding additional manufacturing capability. These
coupled with the proactive work to mitigate these difficult trading factors
has further strengthened the business and created new opportunities. The
operational priorities for the Group in the second half of the year remain
unchanged:
· To invest in and drive organic growth of our VLG Brands, with our
partners and through innovation;
· To manage the supply chain disruption to minimise impact on our
customers and our profitability;
· To consider opportunities for earnings enhancing acquisitions,
utilising the substantially undeployed RCF; and
· To progress our ESG agenda towards becoming a more trusted,
responsible and sustainable business
Jerry Randall
Chief Executive Officer
22 September 2022
1 Adjusted EBITDA is EBITDA before deduction of exceptional items (see note
6) and share based payments (see note 15 for reconciliation)
2 Adjusted earnings per share is profit after tax excluding amortisation,
exceptional items (see note 6) and share-based payments
3 Pro-forma basis i.e. if the acquisitions had been in place for all of the
prior year
Financial Review
Statement of Comprehensive Income
The Group reported revenue for the six-month period of £18.9 million, an
increase of 36% over the £13.9 million reported in 2021, and gross profit of
£7.7 million (H1 2021: £4.9 million), an increase of 55% against the
comparative period in the prior year, with a gross margin percentage
improvement of 5.0% to 40.6% (H1 2021: 35.6%).
The gross margin percentage improvement has been driven by the newly acquired
brands of 6.0%, although partially offset by an adverse 0.3% impact from
further supply price and transport cost increases which are quantified net of
costs passed onto customers, less an adverse product mix impact of 0.9% on the
legacy business due to a higher proportion of revenues coming from lower
margin customer brands than compared with the prior year.
Against the second half of last year, the gross margin has decreased by 1.8%
from 42.4%. The reduction reflects the adverse impact of further cost
increases of 1.5% for utilities, transport and inputs, although we have been
able to mitigate 1.3% of the impact through customer price increases, an
adverse mix impact of 2.1% arose from lower margin customer brands accounting
for a higher proportion of overall legacy business revenues, with other
efficiencies providing a positive impact of 0.5%.
Operating expenses increased in the period to £5.3 million from £4.0 million
in H1 2021, an increase of £1.3 million. Of this increase, £0.5 million
related to the inclusion of the BBIH operation and £0.1 million from the HICP
operation, plus depreciation impact of £0.3 million, a further £0.2 million
for increased investment in advertising and promotional activities and £0.2
million for additional headcount to strengthen the administrative and
commercial teams, leaving a balance of other cost increases amounting to £0.1
million which included the impact from general inflation.
Operating expenses also increased £0.9 million against the last six months of
the prior year (H2 2021: £4.4m). The increase is attributable to additional
headcount of £0.2 million, increased advertising and promotional spend of
£0.3m, increased R&D investment of £0.1 million and other administrative
costs of £0.3 million which represents professional fees which will reduce in
the second half of the year.
Amortisation of £1.6m (H1 2021: £0.6 million) increased significantly due to
the acquisitions made in the previous year.
H1 2022 generated a positive adjusted EBITDA(1) (defined as EBITDA(1)
excluding share based payments and exceptional items) of £3.3 million, an
increase of 71.4% (2021: £1.9 million) at a margin of 17.6% (2021: 14.0%).
Exceptional costs of £0.3 million (2021: £0.7 million) related to warranty
insurance costs associated with the completion of the acquisition of BBIH
which are being prepaid over two years, plus compensation payments and to a
much lesser extent, final integration costs associated with prior year
acquisitions.
Operating profit increased by £0.6 million to £0.4 million (2021: loss of
£0.2 million). The improvement in operating profit against the comparative
period reflects the Adjusted EBITDA(1) growth of £1.4 million, plus reduction
in exceptional costs of £0.4 million, less increased depreciation and
amortisation charges of £1.2 million.
The Group reported a loss after tax of £0.3 million (2021: loss of £0.5
million). Net finance costs increased to £0.7 million (2021: £0.1 million)
and comprised interest on the Group's new revolving credit facility entered in
June 2021 of £0.3 million and adverse impact from foreign exchange movement
of £0.4 million.
These translated into adjusted earnings per share (defined as earnings per
share before amortisation, share based payments and exceptional items) of 1.43
pence (2021: 0.83 pence), an improvement of 0.60 pence, with the improvement
in business performance generating enhanced shareholder value. A basic loss
per share of 0.18 pence was an improvement of 0.19 pence against the prior
period (2021: loss per share 0.37 pence).
Statement of Financial Position
Non-current assets including goodwill increased by £3.8 million to £76.1
million (H1 2021: £72.3 million). The key drivers of the increase has been
intangible asset additions arising from the HICP acquisition completed on 6
August 2021 of £5.1 million, the recognition of a deferred tax asset of £2.1
million, additions to RoU assets of £0.6 million related mainly to extension
of the warehousing agreements in the UK, capital expenditure on property plant
and equipment of £0.3 million plus additional development costs of £0.6
million which have been offset by depreciation and amortisation charges of
£4.9 million.
Inventory increased to £11.5 million (H1 2021 £9.8 million), the significant
increase reflected production planning requirements for the second half of the
year, as supported by the strong order book which has provided excellent
visibility over these revenues and enabled the business to secure components
much further in advance than prior years.
Trade and other receivables increased to £12.6 million (H1 2021: £10.1
million) as expected given the increased revenue compared to the same period
last year. Trade payables increased to £11.1 million (H1 2021: £7.9 million)
driven by the investment in inventory and to a much lesser extent the timing
of other operating costs on a higher base.
Cash flow and net debt
The Group is financed by a revolving credit facility, secured against the
assets and profits of most subsidiaries within the group and with expiry in
June 2024. This facility was established last year in the committed sum of
£30.0 million of which £8.5 million had been drawn at 30 June 2022.
At 30 June 2022, cash and cash equivalents totalled £5.4 million (H1 2021:
£7.9 million) (31 Dec 2021: £5.2 million). The increase of £0.2 million
since the end of last year reflected the following key movements:
· Operating cash inflow before movements in working capital of
£3.1 million (H1 2021: £1.1 million);
· Less a negative working capital flux of £1.3 million (H1 2021:
negative flux of £1.7 million) driven by the inventory build outlined above;
· Less tax paid of £0.3 million to give rise to an overall net
cash inflow from operations of £1.4 million (H1 2021: outflow of £0.9
million);
· Less cash used in investing activities of £0.5 million to fund
capital expenditure (H1 2021: £0.4 million);
· Less cash outflow from financing activities of £0.6m which
include net repayments against interest bearing borrowings of £0.1 million
plus interest paid of £0.3 million and leasing obligation repayments of £0.4
million less net proceeds from issuance of ordinary shares of £0.2 million;
· Less an adverse impact from net foreign exchange of £0.2 million
Total debt including finance lease obligations decreased to £13.0 million (H1
2021: £13.9 million). Net debt excluding finance lease obligations increased
to £3.1 million (H1 2021: £1.3 million) and Net debt including finance lease
obligations increased to £7.6 million (H1 2021: £6.0 million).
Daniel Wells
Chief Financial Officer
22 September 2022
1 Adjusted EBITDA is EBITDA before deduction of exceptional items (see note
6) and share based payments (see note 15 for reconciliation)
2 Adjusted earnings per share is profit after tax excluding amortisation,
exceptional items (see note 6) and share-based payments
3 Pro-forma basis i.e. if the acquisitions had been in place for all of the
prior year
Unaudited Interim Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2022
Note Six months ended Six months ended Year ended
30-Jun-22 30-Jun-21 31-Dec
2021
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Revenue 4.1 18,860 13,866 32,762
Cost of sales (11,203) (8,927) (19,804)
Gross profit 7,657 4,939 12,958
Operating expenses (5,309) (4,026) (8,441)
Impairment losses of financial assets (75) 162 134
Amortisation of intangible assets 5 (1,612) (631) (2,287)
Total administrative expenses (6,996) (4,495) (10,594)
Other income 77 122 338
Operating profit before exceptional items 738 566 2,702
Exceptional items 6 (300) (728) (1,331)
Operating profit/(loss) 438 (162) 1,371
Finance income - 184 89
Finance costs (679) (62) (514)
(Loss)/Profit before tax (241) (40) 946
Tax 7 9 (428) 1,456
(Loss)/Profit for the period attributable to the equity shareholders of the (232) (468) 2,402
parent
Other comprehensive income/(loss) which may be subsequently reclassified to 8 763 (1,219) (1,543)
the income statement
Total comprehensive profit/(loss) for the period attributable to equity 531 (1,687) 859
shareholders of the parent
Basic (loss)/profit per share (pence) attributable to equity shareholders of 9 (0.18) (0.37) 1.91
the parent
Diluted basic (loss)/profit per share (pence) attributable to equity 9 (0.18) (0.37) 1.79
shareholders of the parent
Unaudited Interim Condensed Consolidated Statement of Financial Position
As at 30 June 2022
Note 30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
ASSETS £'000 £'000 £'000
Non-current assets
Intangible assets 10 64,271 61,678 65,079
Property, plant and equipment 11 9,715 10,634 9,737
Deferred tax 7 2,502 - 2,349
76,488 72,312 77,165
Current assets
Inventories 11,491 9,784 9,019
Trade and other receivables 12,637 10,117 12,212
Cash and cash equivalents 5,393 7,896 5,235
29,521 27,797 26,466
TOTAL ASSETS 106,009 100,109 103,631
EQUITY & LIABILITIES
Capital and reserves
Share capital 12 379 377 377
Share premium account 12 65,960 65,738 65,738
Merger reserve 12 7,656 7,656 7,656
Foreign currency translation reserve 649 210 (114)
Share-based payment reserve 976 810 856
Retained earnings (1,581) (4,219) (1,349)
Total equity attributable to equity holders of the parent 74,039 70,572 73,164
LIABILITIES
Current liabilities
Trade and other payables 11,063 7,921 9,717
Taxation 349 561 188
Interest bearing borrowings - Bank Loans - 5,004 -
Interest bearing borrowings - Receivables Finance - 680 -
Interest bearing borrowings - Leasing Obligations 786 477 620
12,198 14,643 10,525
Non-current liabilities
Interest bearing borrowings - Bank Loans 8,528 3,505 8,483
Interest bearing borrowings - Leasing Obligations 3,684 4,213 3,626
Statutory employment provision 1,240 1,126 1,236
Deferred tax liability 7 6,320 6,050 6,597
19,772 14,894 19,942
TOTAL LIABILITIES 31,970 29,537 30,467
TOTAL EQUITY & LIABILITIES 106,009 100,109 103,631
Unaudited Interim Condensed Consolidated Statement of Changes in Equity
As at 30 June 2022
Share capital Share premium account Merger reserve Foreign currency translation reserve Share-based payment reserve Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2021 (Audited) 377 65,738 7,656 1,429 660 (3,751) 72,109
Loss for the period - - - - - (468) (468)
Foreign exchange for period - - - (1,219) - - (1,219)
Total comprehensive income - - - (1,219) - (468) (1,687)
Share options charge - - - - 150 - 150
Transactions with Shareholders - - - - 150 - 150
Balance at 30 June 2021 (Unaudited) 377 65,738 7,656 210 810 (4,219) 70,572
Profit for the period - - - - - 2,870 2,870
Foreign exchange for period - - - (324) - - (324)
Total comprehensive income - - - (324) - 2,870 2,546
Share options charge - - - - 46 - 46
Transactions with Shareholders - - - - 46 - 46
Balance at 31 December 2021 (Audited) 377 65,738 7,656 (114) 856 (1,349) 73,164
Profit for the period - - - - - (232) (232)
Foreign exchange for period - - - 763 - - 763
Total comprehensive income - - - 763 - (232) 531
Share options charge - - - - 120 - 120
Shares issued 2 222 - - - - 224
Transactions with Shareholders 2 222 - - 120 - 344
Balance at 30 June 2022 (Unaudited) 379 65,960 7,656 649 976 (1,581) 74,039
Unaudited Interim Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2022
Six months ended Six months ended Year ended
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Cash flow from operating activities:
(Loss)/Profit before tax (241) (40) 946
Finance cost / (income) 679 (122) 425
Operating profit/(loss) 438 (162) 1,371
Adjustments for:
- Depreciation of property, plant and equipment 855 593 1,415
- Impairment losses of financial assets 75 (162) (134)
- Amortisation of intangible assets 1,612 631 2,287
- Share-based payment expense 120 150 196
Operating cash flow before movements in working capital 3,100 1,050 5,135
(Increase)/decrease in inventories (2,282) 105 718
(Increase) in trade and other receivables (288) (1,231) (2,989)
Increase/(decrease) in trade and other payables 1,232 (572) (908)
Cash generated by operating activities 1,762 (648) 1,956
Tax Paid (319) (293) (1,472)
Tax Receipt - - 117
Net cash from operating activities 1,443 (941) 601
Cash flow from investing activities:
Acquisition of subsidiaries, net of cash acquired - (35,917) (35,917)
Purchases of property, plant and equipment (169) (217) (371)
Expenditure in respect of intangible assets (377) (218) (2,891)
Net cash used by investing activities (546) (36,352) (39,179)
Cash flow from financing activities:
Net proceeds from issuance of ordinary shares 224 - -
Drawdown in interest-bearing borrowings 417 3,647 16,336
Repayment of interest-bearing borrowings (500) (170) (13,614)
Leasing obligation repayments (433) (402) (728)
Interest (paid) / received (272) 53 (492)
Net cash from financing activities (564) 3,128 1,502
Net increase in cash and cash equivalents 333 (34,165) (37,076)
Net foreign exchange difference (175) (34) 216
Cash and cash equivalents at beginning of period 5,235 42,095 42,095
Cash and cash equivalents at end of period 5,393 7,896 5,235
Notes to the Unaudited Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2022
1. Corporate information
The Interim Condensed Consolidated Financial Statements of Venture Life Group
plc and its subsidiaries (collectively, the Group) for the six months ended 30
June 2022 ("the Interim Financial Statements") were approved and authorised
for issue in accordance with a resolution of the directors on [21 September
2022].
Venture Life Group plc ("the Company") is domiciled and incorporated in the
United Kingdom, and is a public company whose shares are publicly traded on
AIM. The Group's principal activities are the development, manufacture and
distribution of healthcare and dermatology products.
2. Basis of preparation
The Group Financial Statements are prepared in accordance with the recognition
and measurement principles of the United Kingdom adopted International
Financial Reporting Standards and does not constitute statutory accounts
within the meaning of section 343 of the Companies Act 2006.
The interim financial information in this report has been prepared using
accounting policies consistent with International Financial Reporting
Standards ("IFRS") as adopted by the UK. IFRS is subject to amendment and
interpretation by the International Accounting Standards Board (IASB) and the
IFRS Interpretations Committee (IFRIC) and there is an ongoing process of
review and endorsement by the UK Endorsement Board. The financial information
has been prepared based on IFRS that the Directors expect to be adopted by the
UK and applicable as at 31 December 2022. The group has chosen not to adopt
IAS 34 "Interim Financial Statements" in preparing the interim financial
information.
The financial information contained in the Interim Financial Statements, which
are unaudited, does not constitute statutory accounts in accordance with the
Companies Act 2006. The financial information for the year ended 31 December
2021 is extracted from the statutory accounts for that year which have been
delivered to the Registrar of Companies and on which the auditor issued an
unqualified opinion that did not include an emphasis of matter reference or
statement made under section 498(2) or (3) of the Companies Act 2006.
3. Accounting policies
The accounting policies adopted in the preparation of the Interim Financial
Statements are consistent with those followed in the preparation of the 2021
Consolidated Financial Statements for the year ended 31 December 2021.
Foreign currencies
The assets and liabilities of foreign operations are translated into sterling
at exchange rates ruling at the balance sheet date. Revenues generated and
expenses incurred in currencies other than sterling are translated into
sterling at rates approximating to the exchange rates ruling at the dates of
the transactions. Foreign exchange differences arising on retranslation of
assets and liabilities of foreign operations are recognised directly in the
foreign currency translation reserve.
The sterling/euro exchange and sterling/sek rates used in the Interim
Financial Statements and prior reporting periods are as follows:
Sterling/euro exchange rates Six months ended Six months ended Year ended
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
Average exchange rate for period 1.188 1.155 1.159
Exchange rate at the period end 1.162 1.164 1.191
Sterling/sek exchange rates Six months ended Six months ended Year ended
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
Average exchange rate for period 12.439 11.771 11.780
Exchange rate at the period end 12.441 11.805 12.218
4. Segmental information
Management has determined the operating segments based on the reports reviewed
by the Group Board of Directors (Chief Operating Decision Maker) that are used
to make strategic decisions. The Board considers the business from a
line-of-service perspective and uses operating profit/(loss) as its profit
measure. The operating profit/(loss) of operating segments is prepared on the
same basis as the Group's accounting operating profit/(loss) before
exceptional items (see note 6)
In line with the 2021 Consolidated Financial Statements, the operations of the
Group are segmented as VLG Brands, which includes sales of healthcare and skin
care products under distribution agreements and direct to UK retailers, and
Customer brands, which includes development and manufacturing.
The following is an analysis of the Group's revenue and results by reportable
segment.
VLG Brands Customer Brands Eliminations Consolidated Group
£'000 £'000 £'000 £'000
Six months to 30 June 2022
Revenue
External Sales 10,077 8,783 - 18,860
Inter-segment sales 633 2,172 (2,805) -
Total revenue 10,710 10,955 (2,805) 18,860
Results
Operating profit before exceptional items and excluding central administrative 1,270 1,163 - 2,433
costs
VLG Brands Customer Brands Eliminations Consolidated Group
£'000 £'000 £'000 £'000
Six months to 30 June 2021
Revenue
External Sales 4,931 8,935 - 13,866
Inter-segment sales - 1,622 (1,622) -
Total revenue 4,931 10,557 (1,622) 13,866
Results
Operating profit before exceptional items and excluding central administrative 669 1,148 - 1,817
costs
VLG Brands Customer Brands Eliminations Consolidated Group
£'000 £'000 £'000 £'000
Twelve months to 31 December 2021
Revenue
External Sales 17,972 14,790 - 32,762
Inter-segment sales - 4,257 (4,257) -
Total revenue 17,972 19,047 (4,257) 32,762
Results
Operating profit before exceptional items and excluding central administrative 4,255 1,812 - 6,067
costs
The reconciliation of segmental operating profit to the Group's operating Six months ended Six months ended Year ended
profit/(loss) before exceptional items excluding central administrative costs
is as follows:
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Operating profit before exceptional items and excluding central administrative 2,433 1,817 6,067
costs
Central administrative costs (1,695) (1,251) (3,365)
Exceptional expenses (300) (728) (1,331)
Operating (loss)/profit 438 (162) 1,371
Net finance cost (679) 122 (425)
(Loss)/profit before tax (241) (40) 946
5. Amortisation of intangible assets
Six months ended Six months ended Year ended
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
Amortisation of: £'000 £'000 £'000
Acquired intangible assets (611) (401) (877)
Patents, trademarks and other intangible assets (786) (48) (1,002)
Capitalised development costs (215) (182) (408)
(1,612) (631) (2,287)
6. Exceptional items
Six months ended Six months ended Year ended
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Costs incurred in potential acquisitions (75) (728) (964)
Integration of acquisitions (89) - (261)
Restructuring costs (136) - -
Other - - (106)
(300) (728) (1,331)
The Group treats costs as exceptional items where their frequency and nature
warrant being separately classified. In the six month period to 30 June 2022,
the Group incurred acquisition costs of £75,000 relate to professional fees
associated with potential M&A and other integration costs of £89,000
being warranty insurance on the acquisition of BBIH which has been prepaid,
plus to a much lesser extent, costs incurred in completing the integration of
prior year acquisitions. Restructuring costs of £136,000 include compensation
for loss of office including related professional fees.
7. Taxation
The Group calculates the income tax expense for the period using the tax rate
that would be applicable to the earnings in the six months to 30 June 2022.
The major components of income tax expense in the Interim Condensed Statement
of Comprehensive Income are as follows:
Six months ended Six months ended Year ended
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Current income tax (438) (428) (764)
Deferred income tax credit related to origination and reversal of timing 447 - 2,220
differences
Income tax credit/(expense) recognised in statement of comprehensive income 9 (428) 1,456
The current income tax expense is based on the profits of the businesses based
in Italy, Netherlands and Sweden. The UK based businesses have utilised tax
losses and thus have no current income tax expense.
At the period end the estimated tax losses amounted to £10,163,000 (30 June
2021: £10,900,000; 31 December 2021: £9,938,000). There has been an increase
in tax losses since the year end due to finalisation of the unused tax losses
position reported at 31 December 2021.
8. Other comprehensive income/(expense)
Other comprehensive income/(expense) represents the foreign exchange
difference on the translation of the assets, liabilities and reserves of
Biokosmes and PharmaSource which have functional currencies of Euros and the
Swedish entities which have functional currencies in Swedish Krona (SEK). The
movement is shown in the foreign currency translation reserve between the date
of acquisition of Biokosmes, when the GBP/EUR rate was 1.193 and the balance
sheet date rate at 30 June 2022 of 1.162 (at 31 December 2021 of 1.191 and at
30 June 2021 of 1.164) together with the same computation for PharmaSource BV
between the date of acquisition when the GBP/EUR rate was 1.185 and the
balance sheet date rate at 30 June 2022 of 1.162. The movement for Sweden is
shown in the foreign currency translation reserve between the date of
acquisition of BBI Healthcare, when the GBP/SEK rate was 11.742 and the
balance sheet date rate at 30 June 2022 of 12.441 (at 31 December 2021 of
12.218 and at 30 June 2021 of 11.805). The result is an amount that may
subsequently be reclassified to profit and loss.
9. Earnings per share
Six months ended Six months ended Year ended
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
Weighted average number of ordinary shares in issue 126,012,009 125,831,530 125,831,530
(Loss)/Profit attributable to equity holders of (232) (468) 2,402
the Company (£'000)
Basic (loss)/profit per share (pence) (0.18) (0.37) 1.91
Diluted (loss)/profit per share (pence) (0.18) (0.37) 1.79
Adjusted earnings per share2 (pence) 1.43 0.83 4.94
Diluted Adjusted earnings per share3 (pence) 1.37 0.78 4.65
2 Adjusted earnings per share is profit after tax excluding amortisation,
exceptional items and share based payments.
3 Diluted Adjusted earnings per share is profit after tax excluding
amortisation, exceptional items and share based payments, diluted by the
inclusion of 5,056,166 stock options and 554,115 long-term incentive plan
awards ("LTIP's"). Including this dilution, the weighted average number of
ordinary shares for the diluted EPS calculation is 131,622,290 shares.
In circumstances where the Basic and Adjusted results per share attributable
to ordinary shareholders are a loss then the respective diluted figures are
identical to the undiluted figures. This is because the exercise of share
options would have the effect of reducing the loss per ordinary share and is
therefore not dilutive under the terms of IAS 33.
10. Intangible assets
At the reporting date the Goodwill generated from the acquisitions of
Biokosmes Srl in March 2014, Periproducts Limited in March 2016, Dentyl in
August 2018, PharmaSource BV in 2020, BBI Healthcare in June 2021 and Helsinn
in August 2021 accounted for £35.8 million of the intangible assets of the
Group (£35.4 million at 31 December 2021). There were no impairments of
goodwill during this time (6 months to June 2021: £ Nil).
Development costs Brands Patents and Trademarks Goodwill Other intangible assets Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost or valuation:
At 1 January 2021 3,844 1,089 1,374 21,277 4,070 31,654
Acquired through business combinations - 16,994 - 13,128 5,788 35,910
Additions 182 - 36 - - 218
Disposals (1) - (389) - - (390)
Foreign exchange (175) - (42) (662) (145) (1,024)
At 30 June 2021 3,850 18,083 979 33,743 9,713 66,368
Acquired through business combinations - 2,010 - 2,049 1,082 5,141
Additions 288 - 7 - - 295
Disposals - - (7) - - (7)
Foreign exchange (89) - - (309) (68) (466)
At 31 December 2021 4,049 20,093 979 35,483 10,727 71,331
Additions 340 - 37 - - 377
Disposals - - - - - -
Foreign exchange 103 - 16 346 76 541
At 30 June 2022 4,492 20,093 1,032 35,829 10,803 72,249
Amortisation:
At 1 January 2021 1,837 - 740 - 2,053 4,630
Charge for the period 185 101 92 - 253 631
Disposals (1) - (389) - - (390)
Foreign exchange (86) - (8) - (87) (181)
At 30 June 2021 1,935 101 435 - 2,219 4,690
Charge for the period 223 721 88 - 624 1,656
Disposals - - (7) - - (7)
Foreign exchange (46) - (5) - (36) (87)
At 31 December 2021 2,112 822 511 - 2,807 6,252
Charge for the period 215 704 82 611 1,612
Foreign exchange 56 - 8 - 50 114
At 30 June 2022 2,383 1,526 601 - 3,468 7,978
Carrying amount:
At 31 December 2021 1,937 19,271 468 35,483 7,920 65,079
At 30 June 2021 1,915 17,982 544 33,743 7,494 61,678
At 30 June 2022 2,109 18,567 431 35,829 7,335 64,271
11. Property, Plant & Equipment
The carrying value of property, plant & equipment at 30 June 2022 reduced
to £9.7 million compared to prior year (30 June 2021: £10.6m). The main
addition during the first six months of the current year related to an
extension of UK warehousing agreements which have increased Right of Use
Assets.
Plant & Equipment Other Equipment Right of Use Assets Land & Buildings Total
£'000 £'000 £'000 £'000 £'000
Cost or valuation:
At 1 January 2021 3,702 233 6,485 - 10,420
Acquired through business combinations 2,098 - - 1,513 3,611
Additions 205 12 729 - 946
Disposals - (11) - - (11)
Foreign exchange (175) (10) (308) (4) (497)
At 30 June 2021 5,830 224 6,906 1,509 14,469
Acquired through business combinations - 2 - (3) (1)
Additions 148 6 4 - 158
Disposals (18) - - - (18)
Foreign exchange (221) (4) (144) (41) (410)
At 31 December 2021 5,739 228 6,766 1,465 14,198
Acquired through business combinations - - - - -
Additions 154 15 558 727
Disposals - - - - -
Foreign exchange 27 5 163 (22) 173
At 30 June 2022 5,920 248 7,487 1,443 15,098
Depreciation:
At 1 January 2021 1,303 134 1,965 - 3,402
Charge for the period 226 12 348 7 593
Disposals - (11) - - (11)
Foreign exchange (58) (5) (84) (2) (149)
At 30 June 2021 1,471 130 2,229 5 3,835
Charge for the period 409 14 347 52 822
Disposals (18) - - - (18)
Foreign exchange (113) (4) (49) (12) (178)
At 31 December 2021 1,749 140 2,527 45 4,461
Charge for the period 388 12 405 50 855
Disposals - - - - -
Foreign exchange 8 4 63 (8) 67
At 30 June 2022 2,145 156 2,995 87 5,383
Carrying amount:
At 31 December 2021 3,990 88 4,239 1,420 9,737
At 30 June 2021 4,359 94 4,677 1,504 10,634
At 30 June 2022 3,775 92 4,492 1,356 9,715
12. Share capital, share premium and merger reserve
Ordinary shares of 0.3p each Ordinary Share Merger
shares
premium
reserve
No. £'000 £'000 £'000
Audited at 31 December 2021 125,831,530 377 65,738 7,656
Unaudited at 30 June 2022 126,498,197 379 65,960 7,656
During the period 1 January 2021 to 30 June 2022, 666,667 shares were issued
at £0.337 each totalling £224,666.78.
13. Related party transactions
The following transactions with related parties are considered by the
Directors to be significant for the interpretation of the Interim Condensed
Financial Statements for the six-month period to 30 June 2022 and the balances
with related parties at 30 June 2022 and 31 December 2021:
Key transactions with other related parties:
Braguts' Real Estate Srl (formally known as Biokosmes Immobiliare Srl), a
company 100% owned by Gianluca Braguti (a Director and shareholder of the
Group) provided property lease services to the Development and Manufacturing
business totalling £195,944 in the six months to 30 June 2022 (£199,134 in
the six months to 30 June 2021). At 30 June 2022, the Group owed Braguts' Real
Estate Srl £32,449 (£33,189 at 30 June 2021). Biokosmes Srl provided
technical services to Braguts'Real Estate in the six months to 30 June 2022 in
the amount of £2,136 (£1,861 in the six months to 30 June 2021). At 30 June
2022 Bragut's Real Estate owed to the Group £nil (£nil at 30 June 2021).
14. Financial instruments
Set out below is an overview of financial instruments held by the Group as at:
30-Jun-22 30-Jun-21 31-Dec-21
Loans and receivables Total financial assets Loans and receivables Total financial assets Loans and receivables Total financial assets
£'000 £'000 £'000 £'000 £'000 £'000
Financial assets:
Trade and other receivables (a) 12,173 12,173 9,386 9,386 11,701 11,701
Cash and cash equivalents 5,393 5,393 7,896 7,896 5,235 5,235
Total 17,566 17,566 17,282 17,282 16,936 16,936
30-Jun-22 30-Jun-21 31-Dec-21
Loans and receivables Total financial liabilities Loans and receivables Total financial liabilities Loans and receivables Total financial liabilities
£'000 £'000 £'000 £'000 £'000 £'000
Financial liabilities:
Trade and other payables (b) 11,057 11,057 8,829 8,829 9,711 9,711
Lease obligations 4,470 4,470 4,690 4,690 4,246 4,246
Interest bearing 8,528 8,528 9,189 9,189 8,483 8,483
Total 24,055 24,055 22,708 22,708 22,440 22,440
(a) Trade and other receivables excludes prepayments.
(b) Trade and other payables excludes deferred revenue.
15. Alternative performance measures
The Group uses certain financial measures that are not defined or recognised
under IFRS. The Directors believe that these non-GAAP measures supplement GAAP
measures to help in providing a further understanding of the results of the
Group and are used as key performance indicators within the business to aid in
evaluating its current business performance. The measures can also aid in
comparability with other companies who use similar metrics. However, as the
measures are not defined by IFRS, other companies may calculate them
differently or may use such measures for different purposes to the Group.
The measures used are Earnings before Interest, Tax, Depreciation and
Amortisation (EBITDA) and Adjusted EBITDA(1) which is defined as EBITDA(1)
excluding share-based payment charges and exceptional items.
Six months Six months Year ended
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Operating profit/(loss) 438 (162) 1,371
Add back:
Depreciation 855 593 1,415
Amortisation 1,612 631 2,287
EBITDA 2,905 1,062 5,073
Add back:
Share-based payment charge 120 150 196
Exceptional costs 300 728 1,331
Adjusted EBITDA 3,325 1,940 6,600
16. Post Balance Sheet Event
There are no post balance sheet events.
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