REG - Venture Life Group - Half-year Report
25/09/2023 07:00
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RNS Number : 4378N Venture Life Group PLC 25 September 2023
25 September 2023
VENTURE LIFE GROUP PLC
("Venture Life", "VLG" or the "Group")
Unaudited interim results for the six months ended 30 June 2023
Venture Life (AIM: VLG), a leader in developing, manufacturing and
commercialising products for the international self-care market, is pleased to
announce its interim results for the six months ended 30 June 2023 (the
"Period"). The Group has delivered another half year of growth and
development across the whole business, along with the integration of the HL
Healthcare business acquired in late 2022. Strong cash generation has been a
theme of the first half, reducing Group net leverage(1) to 1.47x, from 1.65x
at 31 December 2022, with the contingent consideration of £3.0m for the
acquisition of HL Healthcare ("HLH") paid in full during the period.
Financial Highlights
· Group revenue increased 24.5% to £23.5m (H1 22: £18.9m)
· Adjusted EBITDA(3)* up 33.4% to £4.4m (H1 22: £3.3m) and
adjusted EBITDA(3)* margin up 1.3% to 18.9% (H1 22: 17.6%)
· Operating profit before amortisation and exceptional items* up
40.9% to £3.3m (H1 22: 2.4m)
· Loss before tax increased to £1.3m (H1 22: £0.2m) as
anticipated, reflecting higher amortisation and finance costs versus the
comparative period
· Cash from operations up 131% to £4.1m (H1 22: £1.8m) and free
cashflow of £2.6m (H1 22: £0.5m)
· Underlying cash from operations* up 159% to £4.8m (H1 22:
£1.8m) and improved cash conversion* of 108% (H1 22: 56%)
· Net debt reduced to £15.3m with Group net leverage(1)
commensurately reduced to 1.47x (31 Dec 2022: 1.65x)
Operating Highlights
· H1 revenues comprised growth from both the VLG Brands and
Customer Brands with revenue growth in customer brands being particularly
strong. On a proforma(2) basis revenue was 10.4% ahead of the previous year
· Continued strong performance of Balance Activ and Lift Brands,
achieving revenue growth of 24% and 16% respectively
· 17 new listings secured with major retailers for Balance Activ,
Lift and Earol, plus progress on digital transformation; online sales were 69%
ahead of the previous year at £1.6m (H1 22: £0.9m)
Jerry Randall, CEO of Venture Life Group plc commented: "I am delighted with
performance of the business over this first half, with strong growth
contributions, in particular from our Customer Brands, as well as from
Balance Activ and Lift, in the VLG Brands portfolio. The acquisitions we made
in 2021 and 2022 are now fully integrated and delivering good organic growth,
and as expected, we will be launching newly developed products in the second
half of the year and increasing our distribution points in the UK, which will
both contribute to the expected stronger revenues in H2. We have delivered
good cash conversion and seen a meaningful reduction in our debt position,
having now paid the full contingent consideration for the acquisition of HLH
in the first half. We expect strong cash generation to continue through the
second half and will maintain our focus on cost savings to further reduce our
net leverage(1). I send out a big thanks again to all our hard working,
dedicated and innovative team across the Group for continuing to grow our
business in challenging times."
* The performance of the Group is assessed using Alternative Performance
Measures ("APMs"), which are measures that are not defined under IFRS but are
used by management to monitor ongoing business performance against both
shorter term budgets and forecasts and against the Group's longer term
strategic plans. APMs are defined in note 16.
(1) Group net leverage calculated as net debt (excl. finance leases) and using
proforma(1) Adjusted EBITDA(3) on a trailing 12-month basis.
(2) Proforma basis i.e. if the acquisition had been in place for the whole of
the prior period.
(3) Adjusted EBITDA for Group net leverage is EBITDA after deduction of
finance lease costs and before deduction of exceptional items (see note 6) and
share based payments (see note 16 for reconciliation)
Investor Meets Presentation
A live presentation relating to the 2023 Interim Results via Investor Meet
Company will be provided on 27 September 2023 at 11:00am BST. The presentation
is open to all existing and potential shareholders. Investors can sign up to
Investor Meet Company for free and add to meet Venture Life Group plc via:
https://www.investormeetcompany.com/venture-life-group-plc/register-investor
(https://www.investormeetcompany.com/venture-life-group-plc/register-investor)
Investors who already follow Venture Life Group plc on the Investor Meet
Company platform will automatically be invited.
Change of Name of Nominated Adviser and Broker and Appointment as Sole Broker
The Company also announces that its Nominated Adviser and Broker has changed
its name to Cavendish Securities plc ("Cavendish") following completion of its
own merger.
The Company also announces that Cavendish will act as Nominated Adviser and
sole corporate broker with immediate effect.
For further information, please contact:
Venture Life Group PLC +44 (0) 1344 578004
Jerry Randall, Chief Executive Officer
Daniel Wells, Chief Financial Officer
Cavendish Securities plc (Nomad and Broker) +44 (0) 20 7397 8900
Michael Johnson (Sales)
Stephen Keys / Camilla Hume (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 Activ range in the
area of women's intimate healthcare, the Lift and Glucogel product ranges for
hypoglycaemia, Gelclair and Pomi-T for oncology support, Earol for ear wax
removal, 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.
Trading Performance
Overview
Group revenues for the period grew by 24.4% to £23.5m and on a proforma(1)
basis revenue was 10.4% ahead of H1 2022, comprising growth from both the VLG
brands and Customer brands. Excluding the newly acquired HLH, revenue
performance elsewhere in the Group was 11.4% ahead of the same period last
year. Traditionally the VLG Brand revenues are weighted more towards the
second half (2022: H1 44%, H2 56%), and we expect this to be the case in the
second half of 2023 which is also expected to benefit from the impact of new
distribution gains and the launch of several newly developed products.
Revenue £'m Unaudited six months ended 30-Jun-23 Actual 30-Jun-22 Actual 30-Jun-22 Proforma Growth Vs 2022 Growth Vs Proforma
Balance Activ 2.9 2.3 2.3 24% 24%
Lift 2.3 2.0 2.0 16% 16%
Earol 2.3 - 2.2 100% 6%
Ultradex 1.1 0.9 0.9 16% 16%
Gelclair 1.0 0.3 0.3 201% 201%
Glucogel 1.0 1.1 1.1 (9%) (9%)
Dentyl 0.9 1.2 1.2 (29%) (29%)
Footcare 0.8 0.9 0.9 (9%) (9%)
Pomi-T 0.1 0.4 0.4 (77%) (77%)
Other 0.5 0.8 1.0 (32%) (45%)
Sub-Total VLG Brands 12.9 10.1 12.5 27% 3%
Customer Brands 10.6 8.8 8.8 20% 20%
Total 23.5 18.9 18.9 25% 10%
Venture Life Brands
VLG Brands delivered revenues of £12.9m (H1 22: £10.1m), a growth of 27%
over the previous period and accounted for 55% of first half revenues (H1 22:
53%). VLG Brands include the acquisition of HLH on 30 November 2022 which
delivered revenues of £2.4m during the period (H1 22: £2.4m). HLH's main
product is Earol which contributes c.95% of the sales and achieved revenues of
£2.3m in the period (H1 22: £2.2m), a growth of 6.1% over the previous
period on a proforma(2) basis.
On a proforma(1) basis, revenue from VLG Brands was 3.5% ahead of the same
period the previous year; within this portfolio the Balance Activ and Lift
brands have continued to perform strongly, achieving revenue growth of 24% and
16% respectively during the period. Revenues for the VLG Brands are expected
to show stronger growth in the second half consistent with previous years.
The Group's focus for 2023 is driving organic growth through the dual approach
of distribution gains and new product development. The Group's extensive
research and development capability, coupled with significant capacity in its
manufacturing operations, means it is well positioned to rapidly innovative
and develop efficacious new products for its VLG Brand portfolio. The second
half of 2023 will see the market entry for some of these new products and the
Group has a program to continue this innovation program over the coming years.
VLG Brands Revenue £'m 30-Jun-23 Actual 30-Jun-22 Actual 30-Jun-22 Proforma Growth Vs Reported % Growth Vs Proforma %
Unaudited six months ended
Energy Management 3.3 3.2 3.2 4% 4%
Women's Health 2.9 2.3 2.3 24% 24%
Ear, Nose & Throat 2.4 - 2.4 100% 0%
Oral Care 2.0 2.4 2.4 (16%) (16%)
Oncology Support 1.2 0.9 0.9 42% 42%
Footcare 0.8 0.9 0.9 (9%) (9%)
Other 0.2 0.4 0.4 (44%) (44%)
Total 12.9 10.1 12.5 27% 3%
Energy Management
Energy management (LIFT & Glucogel) grew by 4% to £3.3m (H1 22: £3.2m).
These products are predominantly sold in the UK & Eire and the main
component of this first half growth has been the impact of the increased
listing of Lift in Eire through our distributor there. As with most of our
VLG Brands, we are increasing our online revenues through Amazon at this time,
and although small, we saw growth in the Lift online revenues in both the UK
and USA driven by advertising investment and listing optimisation.
Lift revenues for the first half were £2.3m (H1 22: £2.0m) and Glucogel
revenues £1.0m (H1 22: £1.0m). The second half of the year is expected to
deliver more growth for Lift as several newly developed products will be
launching in both the off-line and on-line settings. Extension of the Lift
brand with these new products will allow us to broaden the offering and bring
new users into the brand, as well as extend our points of distribution.
Women's Health
Revenues for the Balance Activ brand grew 24% to £2.9m (H1 22: £2.3m).
Revenues from this brand were split £1.2m (H1 22: £1.1m) in UK & EU
direct to retail and online, and £1.7m (H1 22: £1.2m) internationally with
our distribution partners.
Growth in the UK & EU retail and online has been driven by several
initiatives. The launch of a 14 tube multipack (compared to the usual 7 tube
pack) of the Balance Activ gel has allowed us to attract value shoppers at a
time when cost of living pressures have been increasing. Performance in the
grocery channel has also been good, with both the BV gel and pessary in
growth, and the launch of our newly developed Thrush cream in the first
outlets.
Internationally our partners have performed well, with increased geographic
distribution contributing to growth. Revenues with partners rose 33% to £1.7m
(H1 22: £1.2m). The launch of the Balance Activ gel in Brazil with our
partner contributed to revenue growth in the first half.
Ear, Nose & Throat
Revenues for the brands in this area were £2.4m (H1 22: £nil) and arose from
the HL Healthcare Limited business, acquired on 30 November 2022. Products in
this portfolio are Earol, Earol Swim and Sterinase.
Earol accounts for the vast majority of revenues (and includes sales under the
brand name Vaxol in certain European territories) and was £2.2m in the first
half of 2023. On a like for like basis in 2022, revenues were £2.1m, so H1
2023 was 6% ahead of the H1 2022 revenues. This growth has been driven more on
the international side than in the UK. New points of distribution and the
launch of the product on Amazon is expected to contribute to growth in the UK
in H2, with new product development also being launched in H2 2023.
Earol Swim revenues were £0.2m vs £0.2m on a like for like basis in H1 2022.
Oncology Support
Revenues for the brands in this area were up 42% to £1.2m (H1 22: £0.9m),
driven by growth of Gelclair, with revenues three times higher than for the
same period in 2022 at £1.0m (H1 22: £0.3m). This brand is sold entirely
through partners, and as indicated when we acquired this brand, timing of
revenues can be variable and growth is dependent, to a large extent, on
geographic expansion. Integration into the Group from the previous owner,
coupled with the MDR process meant revenues in H1 2022 were lower than
historically seen for the products, and revenues in H1 2023 are more
reflective of the normal level of business. New agreements signed in 2022 are
expected to continue to contribute to growth in the second half.
Pomi T revenues were lower in the first half of 2023 at £0.1m (H1 22: £0.5m)
due to the timing of delivery of orders. H2 revenues are expected to be
significantly higher based on the order book in hand for this product. With
only a small number of current partners, activity is ongoing to increase the
geographic penetration of this brand, as well as areas of new product
development.
Oral care
Revenues for the oral care brands were down 16% at £2.0m compared to the same
period last year (H1 22: £2.4 m). Whilst Ultradex revenues grew in the
period there was an overall revenue reduction in this sector driven by lower
Dentyl revenues, emanating from the combination of poor performance by our
Chinese partner and aggressive promotion of competitor brands during the
Period.
Revenues for UltraDEX were 16% higher at £1.1m (H1 22: £0.9m), as we see a
continued return to usage of the product post lockdowns with the growth being
driven primarily by our online sales through Amazon.
Dentyl revenue, by comparison, was down 9% in the UK, to £0.9m (H1 22:
£1.0m) as a result of aggressive promotion from the big competitors, such as
Listerine. Internationally we currently only have one partner for Dentyl,
Samarkand in China, and we have recorded no sales to them in the first half of
2023 (H1 22: £0.3m), as they have performed poorly with the product, and this
is under review. Elsewhere within the International business, other oral care
revenues from non-core products were £0.1m (H1 22: £0.2m).
Digital
Direct online sales (through Amazon) increased 69% to £1.6m (H1 22: £0.9m),
as a result of strong growth by a number of our brands, including Balance
Activ and Lift, and included the launch of Balance Activ through Amazon
Germany, the largest Amazon market in the EU. As a result of this growth,
online sales represented 12.3% of the Venture Life Brands revenues in H1 2023,
compared to 9.7% in H1 2022.
We expect to see further progress in online revenues in the second half, as we
extend our online presence, including the launch of Earol on Amazon and
further European roll out of Balance Activ across the Amazon platform.
Customer Brands
The Customer Brands business had a strong first half with revenue increasing
20% to £10.6m (H1 22: £8.8m). This growth was delivered mainly from existing
customers and included £1.2m of revenues from newly developed products that
completed development in 2022. This shows the strength of the in-house
development expertise we have within our Italian facility, which has also
developed a number of new products for the Venture Life Brands which will be
launching in H2 2023 and beyond. The balance of growth came from the existing
customers growing their own sales and showing that demand remains strong in
the consumer health space.
Operational developments
Operationally we have worked in the first half to bolster the team to manage
the growing business. This included the appointment of Fabio Perego as Group
Operations Director, and General Manager of both the Biokosmes manufacturing
facility in Italy and the Rolf Kullgren manufacturing facility in Sweden.
Fabio has extensive experience in the Contract Development and Manufacturing
Organisation space, and in particular, in medical devices, and will be
responsible for the harmonisation of the two facilities and the maximisation
of efficiencies in production at the two sites.
Innovation and the Medical device Directive
At our Biokosmes development facility we have a deep technical department
covering research, innovation, development, regulatory and quality assurance.
With our own quality management systems in place across the business (in
Italy, Sweden, The Netherlands and the UK) we are strongly positioned to
develop and manufacture new products for both the Venture Life and Customer
Brands business units. We have seen this already in the Customer Brands
business in the first half, and will see this impact also in the Venture Life
Brands in the second half, with the launch of a number of new products in UK
retailers including:
• Baby Earol
• Lift Energy Boost Range
• Balance Activ cleansing range
• Balance Activ Thrush cream
• Women's Intimate Health probiotic range
During 2023 and into 2024 it is our intention to focus resource on the
expansion of our revenues through new product development and organic growth,
and further capitalising on the brands and products we have acquired over
recent years.
The transition from the Medical Device Directive (MDD) to the Medical Device
Regulations (MDR) continues. However, an extension to the deadline to
transfer products has been recently announced, and now products can continue
to be sold under their MDD certificates until May 2028 (previously May 2024),
which means that the timing to complete new MDR registrations has become more
relaxed with 4 additional years to achieve this. As a result, we have slowed
down the registration process for the remaining technical files that we have
not yet registered under MDR, to alleviate pressure in the approval system.
This will also have an added benefit that the costs to undertake these new
registrations (in excess of €1 million across all our files) can be spread
over the next 4 and a half years rather than the next 12 months. This will
free up more cash flow to further reduce our net leverage(1).
Sustainable Life
Our progress in the pursuit of our sustainability goals continued to be strong
in the first half. We were delighted to bolster the ESG team in February
2023, with the appointment of Emma Caprini, a dedicated executive in the ESG
team in Italy. Objectives for ESG in 2023 are:
• Obtaining BCorp status for our Biokosmes manufacturing
facility - this will also be a test run of the process for obtaining BCorp
for the whole Group in 2024.
• Assessing the carbon footprint of our Biokosmes manufacturing
facility and designing the net zero 2050 plan for the facility - this will
also be a test run of the process for obtaining carbon footprint and net zero
plan for the whole Group in 2024.
• Undertaking the life cycle analysis for three of Venture Life
Brands - Dentyl, UltraDEX and Balance Activ.
We are on target to complete these objectives by the end of 2023.
Post period end, we have been awarded the Ecovadis Silver Sustainability
Rating at our Biokosmes facility. Ecovadis is world's largest and most
reliable provider of corporate sustainability assessments and has more than
90,000 companies assessed in 175 countries in over 200 industries. Many of our
customers look to this assessment to understand our commitment to
sustainability. This Silver Sustainability Rating places us in the top 25% of
companies assessed. Last year we were awarded the Bronze Award and it is as a
result of numerous improvements around the facility and hard work by the whole
team that we achieved this improved rating.
Profit and loss account
The Group delivered Adjusted EBITDA(1) of £4.4m for the six-month period, an
increase of 33% over the £3.3m reported in the previous year and at an
improved margin of 18.9% (H1 22: 17.6%).
The inflationary environment has been challenging over the last three years
but we have continued to see this plateau gradually over the course of 2023.
Raw materials and packaging, which had been procured at inflated prices during
the height of the supply chain issues in the prior year, have now unwound
through cost of goods sold.
Our teams have worked hard to mitigate the financial impact, delivering
production efficiencies and extending our supplier network to increase the
number of alternative supply options available. Costs have been passed onto
customers only where it has been possible to do so. As there is a lag effect
between these costs being incurred and being passed onto customers, we expect
to see a positive impact on margins in the second half of 2023.
In addition, the first half of 2023 has absorbed the impact of fair value
adjustments on inventory acquired as part of the HLH acquisition which
inflated the cost of goods sold and this inventory has been sold in full
during the period.
The net impact of these factors resulted in an overall decline in gross margin
by 350 basis points (bp) to 37.1% (H1 22: 40.6%) and a 14% increase in gross
profit to £8.7m (H1 22: £7.7m),in line management's expectations and is
expected to improve in the second half of the year.
Our vertically integrated business model enables newly acquired brands to be
integrated profitably within the existing infrastructure. Operating costs
(defined as operating expenses less depreciation) were in line with the
previous year at £4.5m (H1 22: £4.5m) and as a % of revenue reduced by 450bp
to 19.1% (H1 22: 23.6%) which highlights the Group's ability to deliver
significant operational gearing benefit.
Operating profit before amortisation and exceptional items increased by 40.9%
to £3.3m (H1 22: £2.4m) reflecting the pull through effect of the EBITDA
improvement which was offset partially by an £0.2m increase in depreciation
charges to £1.0m (H1 22: £0.9m).
As disclosed in the 2022 full year results, there was a material uncertainty
around the impairment assessment of Dentyl due to an unknown speed of recovery
from our partner in China. This position has not changed since last year and
coupled with a decline in the UK performance, has resulted in an impairment of
£0.4m being recognised against the Dentyl brand during the period. The
carrying value of the attributable intangible assets is now £3.8m at 30 June
2023 (30-Jun-22: £4.3m). The Group is actively seeking new opportunities for
the brand internationally, however as a prudent measure we have reduced the
useful economic life (UEL) applied to Dentyl for amortisation purposes to
mitigate the risk of further impairment.
Amortisation of £2.3m (H1 22: £1.6m) increased significantly due to the
acquisition of HLH as well as a reduction in the UEL of the acquired brand
pertaining to Dentyl. Exceptional costs incurred to complete integration of
previous acquisitions have reduced to £0.2m (H1 22: £0.3m) and were
significantly lower than the full year prior year.
Net finance costs of £1.7m were significantly higher than the prior period
(H1 22: £0.7m) due to a significant increase in interest payable on the
Group's revolving credit facility by £0.6m to £0.8m (H1 22: £0.2m)
reflecting the additional debt drawn to fund the acquisition of HLH which has
been compounded by the increase in the Bank of England base rate. The balance
of the overall increase comprised non-cash factors, including a £0.2m
increase in amortisation of the up-front fees of this facility which are
already paid for, the profile of amortisation is aligned to the anticipated
usage of the facility over the term, as such the full year finance charge in
the P&L is expected to increase. Net exchange losses of £0.7m (H1 22:
£0.4m) accounted for the remainder of the increase.
Net of the increase in amortisation, impairment and finance costs and
reduction in exceptional costs, the loss before tax for the period increased
to £1.3m (H1 22: £0.2m).
Cash generation
Free cash flow in the period was £2.6m (H1 22: £0.5m). Net debt reduced to
£15.3m as at 30 June 2023 (31-Dec-22: £16.6m) and Group net leverage(1)
reduced to 1.47x at the period end (31-Dec-22: 1.65x). Cash generated from
operations increased to £4.1m (H1 22: £1.8m) and underlying cash from
operations increased to £4.8m (H1 22: £1.8m) aided by improved cashflow
conversion of 108% versus the 56% in the comparative period.
This cash generation has been used to reduce interest bearing borrowings by
£3.3m to £19.0m at 30 June 2023 (31-Dec-22: £22.3m) including full payment
of the contingent consideration of £3.0m on the acquisition of HLH.
We expect cash generation to increase further in H2, reflecting the growth in
revenues and collection of cash from customer billing following strong
revenues at the end of H1, and for Group net leverage(1) to reduce to
approximately 1.0-1.1x by the end of the year.
Current trading and outlook
Post period trading continues to perform well. We anticipate strong sales
growth in H2 across our VLG Brands, including the impact of new distribution
in the UK which is bolstered by new product launches and the continued strong
sales growth from our Customer Brands. The order book remains strong and is
c.35% up since the end of the previous year.
The order book growth is driven by our higher margin VLG Brands and, on a
standalone basis, revenue visibility for this part of the business has
increased 2.5x compared to the same time last year giving us confidence in the
Group's ability to deliver an improved gross margin in the second half. This
together with a tight control on operating costs underpins the Board's
confidence in meeting management's expectations for the full year
notwithstanding the continued strong performance of the lower margin customer
brands business.
Jerry
Randall
Daniel Wells
Chief Executive
Officer
Chief Financial Officer
25 September
2023
25 September 2023
(1) Group net leverage calculated as net debt (excl. finance leases) and using
proforma(2) Adjusted EBITDA(3) on a trailing 12-month basis.
(2) Proforma basis i.e. if the acquisition had been in place for the whole of
the prior period.
(3) Adjusted EBITDA for Group net leverage is EBITDA after deduction of
finance lease costs and before deduction of exceptional items (see note 6) and
share based payments (see note 16 for reconciliation)
Unaudited Interim Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2023
Note Six months ended Six months ended Year
ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Revenue 4.1 23,454 18,860 43,980
Cost of sales (14,733) (11,203) (26,315)
Gross profit 8,721 7,657 17,665
Operating expenses (5,496) (5,309) (10,927)
Impairment gain / (losses) of financial assets 1 (75) 180
Amortisation of intangible assets 5 (2,321) (1,612) (3,564)
Impairment of intangible assets (389) - -
Total administrative expenses (8,205) (6,996) (14,311)
Other income 84 77 151
Operating profit before exceptional items 600 738 3,505
Exceptional items 6 (217) (300) (1,278)
Operating profit 383 438 2,227
Finance income - - 1
Finance costs 7 (1,716) (679) (1,522)
(Loss)/Profit before tax (1,333) (241) 706
Tax 8 (175) 9 (186)
(Loss)/Profit for the period attributable to the equity shareholders of the (1,508) (232) 520
parent
Other comprehensive (loss)/income which may be subsequently reclassified to 9 (345) 763 1,679
the income statement
Total comprehensive (loss)/profit for the period attributable to equity (1,853) 531 2,199
shareholders of the parent
Basic (loss)/profit per share (pence) attributable to equity shareholders of 10 (1.19) (0.18) 0.41
the parent
Diluted basic (loss)/profit per share (pence) attributable to equity 10 (1.19) (0.18) 0.39
shareholders of the parent
Unaudited Interim Condensed Consolidated Statement of Financial Position
As at 30 June 2023
Note 30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
ASSETS £'000 £'000 £'000
Non-current assets
Intangible assets 12A 75,846 64,271 78,694
Property, plant and equipment 12B 9,006 9,715 10,090
Deferred tax 8 2,457 2,502 2,443
87,309 76,488 91,227
Current assets
Inventories 12,666 11,491 11,998
Trade and other receivables 13,034 12,637 16,433
Cash and cash equivalents 3,658 5,393 5,631
29,358 29,521 34,062
TOTAL ASSETS 116,667 106,009 125,289
EQUITY & LIABILITIES
Capital and reserves
Share capital 13 379 379 379
Share premium account 13 65,960 65,960 65,960
Merger reserve 13 7,656 7,656 7,656
Foreign currency translation reserve 1,220 649 1,565
Share-based payment reserve 932 976 812
Retained earnings (2,221) (1,581) (713)
Total equity attributable to equity holders of the parent 73,926 74,039 75,659
LIABILITIES
Current liabilities
Trade and other payables 8,973 11,063 11,725
Taxation 1,055 349 891
Interest bearing borrowings - Deferred contingent consideration - - 2,947
Interest bearing borrowings - Leasing obligations 761 786 920
10,789 12,198 16,483
Non-current liabilities
Interest bearing borrowings - Bank loans 16,898 8,528 17,314
Interest bearing borrowings - Leasing obligations 3,257 3,684 3,651
Interest bearing borrowings - Subordinated loan (deferred consideration) 2,106 - 2,014
Statutory employment provision 1,413 1,240 1,461
Deferred tax liability 8 8,278 6,320 8,707
31,952 19,772 33,147
TOTAL LIABILITIES 42,741 31,970 49,630
TOTAL EQUITY & LIABILITIES 116,667 106,009 125,289
Unaudited Interim Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2023
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 2022 (Audited) 377 65,738 7,656 (114) 856 (1,349) 73,164
Loss 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
Profit for the period - - - - - 752 752
Foreign exchange for period - - - 916 - - 916
Total comprehensive income - - - 916 - 752 1,668
Share options charge - - - - (48) - (48)
Share options charge recycling - - - - (116) 116 -
Transactions with Shareholders - - - - (164) 116 (48)
Balance at 31 December 2022 (Audited) 379 65,960 7,656 1,565 812 (713) 75,659
Profit for the period - - - - - (1,508) (1,508)
Foreign exchange for period - - - (345) - - (345)
Total comprehensive income - - - (345) - (1,508) (1,853)
Share options charge - - - - 120 - 120
Transactions with Shareholders - - - - 120 - 120
Balance at 30 June 2023 (Unaudited) 379 65,960 7,656 1,220 932 (2,221) 73,926
Unaudited Interim Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2023
Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Cash flow from operating activities:
(Loss)/profit before tax (1,333) (241) 706
Finance cost 1,716 679 1,521
Operating profit 383 438 2,227
Adjustments for:
- Depreciation of property, plant and equipment 1,006 855 1,821
- Impairment losses of financial assets (1) 75 (180)
- Amortisation of intangible assets 2,321 1,612 3,564
- Impairment of intangible assets 389 - -
- Loss on disposal of non-current assets - - 40
- Share-based payment expense 120 120 72
Operating cash flow before movements in working capital 4,218 3,100 7,544
Increase in inventories (952) (2,282) (2,329)
Decrease/(increase) in trade and other receivables 3,096 (288) (2,517)
(Decrease)/increase in trade and other payables (2,296) 1,232 3,489
Cash generated by operating activities 4,066 1,762 6,187
Tax paid (370) (319) (674)
Tax receipt - - 53
Net cash from operating activities 3,696 1,443 5,566
Cash flow from investing activities:
Acquisition of subsidiaries, net of cash acquired (2,933) - (7,482)
Purchases of property, plant and equipment (242) (169) (860)
Expenditure in respect of intangible assets (414) (377) (3,346)
Net cash used by investing activities (3,589) (546) (11,688)
Cash flow from financing activities:
Net proceeds from issuance of ordinary shares - 224 224
Drawdown in interest-bearing borrowings 1,838 417 14,985
Repayment of interest-bearing borrowings (2,276) (500) (6,728)
Leasing obligation repayments (479) (433) (922)
Interest paid (755) (272) (637)
Net cash from financing activities (1,672) (564) 6,922
Net (decrease)/increase in cash and cash equivalents (1,565) 333 800
Net foreign exchange difference (408) (175) (404)
Cash and cash equivalents at beginning of period 5,631 5,235 5,235
Cash and cash equivalents at end of period 3,658 5,393 5,631
Notes to the Unaudited Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2023
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 2023 ("the Interim Financial Statements") were approved and authorised
for issue in accordance with a resolution of the directors on 25 September
2023.
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 2023. 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
2022 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 included 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
Consolidated Financial Statements for the year ended 31 December 2022.
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 Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
Average exchange rate for period 1.141 1.188 1.173
Exchange rate at the period end 1.163 1.162 1.129
Sterling/SEK exchange rates Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
Average exchange rate for period 12.926 12.439 12.461
Exchange rate at the period end 13.710 12.441 12.583
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 2022 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 2023
Revenue
External Sales 12,875 10,579 - 23,454
Inter-segment sales 683 3,637 (4,320) -
Total revenue 13,558 14,216 (4,320) 23,454
Results
Operating (loss)/profit before exceptional items and excluding central (1,466) 4,315 - 2,849
administrative costs
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
Twelve months to 31 December 2022
Revenue
External sales 23,135 20,845 - 43,980
Inter-segment sales 1,444 4,776 (6,220) -
Total revenue 24,579 25,621 (6,220) 43,980
Results
Operating profit before exceptional items and excluding central administrative 3,799 3,674 - 7,473
costs
Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Operating profit before exceptional items and excluding central administrative 2,849 2,433 7,473
costs
Central administrative costs (2,249) (1,695) (3,968)
Exceptional expenses (217) (300) (1,278)
Operating profit 383 438 2,227
Net finance cost (1,716) (679) (1,521)
(Loss)/profit before tax (1,333) (241) 706
,
5. Amortisation of intangible assets
Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
Amortisation of: £'000 £'000 £'000
Acquired intangible assets (794) (611) (1,293)
Patents, trademarks and other intangible assets (1,189) (786) (1,686)
Capitalised development costs (338) (215) (585)
(2,321) (1,612) (3,564)
6. Exceptional items
Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Costs incurred in acquisitions - (75) (860)
Integration of acquisitions (160) (89) (202)
Restructuring costs (57) (136) (216)
(217) (300) (1,278)
The Group treats costs as exceptional items where their frequency and nature
warrant being separately classified. In the six month period to 30 June 2023,
the Group incurred integration costs of acquisitions of £160,000 which
included the final unwind of prepaid warranty insurance on the acquisition of
BBIH and costs incurred in completing the integration of HL Healthcare.
Restructuring costs of £57,000 were incurred in the period and have been
classified as an exceptional item in consistence with prior periods.
7. Finance costs
Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
On loans and overdrafts 802 241 594
Amortised finance issue costs 183 (13) 212
Interest on lease liabilities 34 31 71
Net exchange difference 697 420 645
1,716 679 1,522
8. 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 2023.
The major components of income tax expense in the Interim Condensed Statement
of Comprehensive Income are as follows:
Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Current income tax (599) (438) (1,206)
Deferred income tax expense related to origination and reversal of timing 424 447 1,020
differences
Income tax (expense)/credit recognised in statement of comprehensive income (175) 9 (186)
The current income tax expense is based on the profits of the businesses based
in Italy and Netherlands. 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 £9,867,000 (30 June
2022: £10,163,000; 31 December 2022: £9,867,000).
9. 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 2023 of 1.163 (at 31 December 2022 of 1.129 and at
30 June 2022 of 1.162) 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 2023 of 1.163. 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 2023 of 13.710 (at 31 December 2022 of
12.583 and at 30 June 2022 of 12.441). The result is an amount that may
subsequently be reclassified to profit and loss.
10. Earnings per share
Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
Weighted average number of ordinary shares in issue 126,498,197 126,012,009 126,257,101
(Loss)/profit attributable to equity holders of (1,508) (232) 520
the Company (£'000)
Basic (loss)/profit per share (pence) (1.19) (0.18) 0.41
Diluted (loss)/profit per share (pence) (1.19) (0.18) 0.39
Adjusted profit per share (pence)(4) 0.91 1.43 4.30
Diluted adjusted profit per share (pence)(5) 0.86 1.37 4.07
(4) Adjusted earnings per share is profit after tax excluding amortisation,
exceptional items and share based payments.
(5) Diluted adjusted earnings per share is profit after tax excluding
amortisation, exceptional items and share based payments, diluted by the
inclusion of 6,454,515 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 133,506,827 (30 June 2022:
131,622,290; 31 December 2022: 133,393,929) 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.
11. 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, Helsinn in
August 2021 and HL Healthcare in November 2022 accounted for £38.8m of the
intangible assets of the Group (£35.8m at 31 December 2022). There was an
impairment of Goodwill of £389,000 (6 months to June 2022: £nil).
Development Costs Brands Patents and Trademarks Goodwill Other Intangible Assets Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost or valuation:
At 1 January 2022 4,049 20,093 979 35,483 10,727 71,331
Acquired through business combinations - - - - - -
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
Acquired through business combinations - 9,282 - 3,407 2,628 15,317
Additions 583 - 8 - - 591
Disposals (84) - - - - (84)
Foreign exchange 128 - 19 416 92 655
At 31 December 2022 5,119 29,375 1,059 39,652 13,523 88,728
Additions 411 - 3 - - 414
Disposals - - - - - -
Foreign exchange (182) - (20) (428) (94) (724)
At 30 June 2023 5,348 29,375 1,042 39,224 13,429 88,418
Amortisation:
At 1 January 2022 2,112 822 511 - 2,807 6,252
Charge for the period 215 704 82 611 1,612
Disposals - - - - - -
Foreign exchange 56 - 8 - 50 114
At 30 June 2022 2,383 1,526 601 - 3,468 7,978
Charge for the period 370 818 82 - 682 1,952
Disposals (46) - - - - (46)
Foreign exchange 73 - 10 - 67 150
At 31 December 2022 2,780 2,344 693 - 4,217 10,034
Charge for the period 338 1,115 74 - 794 2,321
Impairment charge - - - 389 - 389
Disposals - - - - - -
Foreign exchange (89) - (12) - (71) (172)
At 30 June 2023 3,029 3,459 755 389 4,940 12,572
Carrying amount:
At 31 December 2022 2,339 27,031 366 39,652 9,306 78,694
At 30 June 2022 2,109 18,567 431 35,829 7,335 64,271
At 30 June 2023 2,319 25,916 287 38,835 8,489 75,846
12. Property, Plant & Equipment
The carrying value of property, plant & equipment at 30 June 2023 reduced
to £9.0m compared to prior year (30 June 2022: £9.7m).
Plant & Equipment Other Equipment Right of Use Assets Land & Buildings Total
£'000 £'000 £'000 £'000 £'000
Cost or valuation:
At 1 January 2022 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
Acquired through business combinations - 13 - - 13
Additions 681 10 476 - 1,167
Disposals (45) - (325) - (370)
Foreign exchange 83 8 201 (13) 279
At 31 December 2022 6,639 279 7,839 1,430 16,187
Additions 215 12 34 15 276
Disposals (202) (2) - - (204)
Foreign exchange (456) (8) (207) (97) (768)
At 30 June 2023 6,196 281 7,666 1,348 15,491
Depreciation:
At 1 January 2022 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
Charge for the period 433 15 468 50 966
Disposals (43) - (325) - (368)
Foreign exchange 30 4 87 (5) 116
At 31 December 2022 2,565 175 3,225 132 6,097
Charge for the period 420 16 521 49 1,006
Disposals (202) (2) - - (204)
Foreign exchange (271) (4) (99) (40) (414)
At 30 June 2023 2,512 185 3,647 141 6,485
Carrying amount:
At 31 December 2022 4,074 104 4,614 1,298 10,090
At 30 June 2022 3,775 92 4,492 1,356 9,715
At 30 June 2023 3,684 96 4,019 1,207 9,006
13. 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 2022 126,498,197 379 65,960 7,656
Unaudited at 30 June 2023 126,498,197 379 65,960 7,656
During the period 31 December 2022 to 30 June 2023 there has not been a change
in the shares issued.
14. 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 2023 and the balances
with related parties at 30 June 2023 and 31 December 2022:
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 £218,964 in the six months to 30 June 2023 (£195,944 in
the six months to 30 June 2022). At 30 June 2023, the Group owed Braguts' Real
Estate Srl £43,680 (£32,449 at 30 June 2022). Biokosmes Srl provided
technical services to Braguts'Real Estate in the six months to 30 June 2023 in
the amount of £243 (£2,136 in the six months to 30 June 2022). At 30 June
2023 Bragut's Real Estate owed to the Group £nil (£nil at 30 June 2022).
15. Financial instruments
Set out below is an overview of financial instruments held by the Group as at:
30-Jun-23 30-Jun-22 31-Dec-22
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) 12,785 12,785 12,173 12,173 16,152 16,152
Cash and cash equivalents 3,658 3,658 5,393 5,393 5,631 5,631
Total 16,443 16,443 17,566 17,566 21,783 21,783
30-Jun-23 30-Jun-22 31-Dec-22
Liabilities (amortised cost) Total financial liabilities Liabilities (amortised cost) Total financial liabilities Liabilities (amortised cost) Total financial liabilities
£'000 £'000 £'000 £'000 £'000 £'000
Financial liabilities:
Trade and other payables (b) 8,912 8,912 11,057 11,057 11,725 11,725
Lease obligations 4,018 4,018 4,470 4,470 4,571 4,571
Interest bearing 19,004 19,004 8,528 8,528 22,275 22,275
Total 31,934 31,934 24,055 24,055 38,571 38,571
(a) Trade and other receivables excludes prepayments.
(b) Trade and other payables excludes deferred revenue.
16. 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.
Measure Definition Reconciliation to GAAP measure
EBITDA and Adjusted EBITDA Earnings before interest, tax, depreciation, amortisation and impairment Note a below
(EBITDA)
and Adjusted EBITDA which is defined as EBITDA excluding share-based payment
charges and exceptional items.
Operating profit before amortisation and exceptional items Operating profit before amortisation and exceptional items. Note b below
Underlying cash from operations Cash from operations excluding payment for exceptional costs. Note c below
Cash conversion Underlying cash from operations as a percentage of Adjusted EBITDA. Note d below
Free cash flow Free cash flow is defined as net cash generated from operations less cash Note e below
payments made for leases and capital expenditure.
Net debt Net debt is defined as the Group's gross bank debt position net of cash. Note f below
Net leverage Net leverage calculated as net debt (excl. finance leases) and using Note g below
proforma(2) Adjusted EBITDA on a trailing 12-month basis.
Proforma Proforma figures compare financial results in one period with those for the Not needed
previous period, excluding the impact of acquisitions and disposals made in
either period. For 2022, like-for-like revenue includes HL Healthcare Ltd
which was acquired in December 2022
a) EBITDA and Adjusted EBITDA Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Operating profit 383 438 2,227
Add back:
Depreciation 1,006 855 1,821
Amortisation 2,321 1,612 3,564
Impairment charge 389 - -
EBITDA 4,099 2,905 7,612
Add back:
Share-based payment charge 120 120 72
Exceptional costs 217 300 1,278
Adjusted EBITDA 4,436 3,325 8,962
b) Operating profit before amortisation and exceptional items Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Operating profit 383 438 2,227
Add back:
Amortisation 2,321 1,612 3,564
Impairment charge 389 - -
Exceptional costs 217 300 1,278
Operating profit before amortisation and exceptional items 3,310 2,350 7,069
c) Underlying cash from operations Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Cash from operating activities 4,066 1,762 6,187
Exceptional costs paid in period 707 84 488
Underlying cash from operations 4,773 1,846 6,675
d) Cash conversion Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Cash generated by operating activities 4,066 1,762 6,187
Add back:
Exceptional costs paid 707 84 488
Adjusted cash generated by operating activities 4,773 1,846 6,675
Adjusted EBITDA 4,436 3,325 8,962
Cash conversion 108% 56% 74%
e) Reconciliation of free cash flow Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Net cash generated by operating activities 3,696 1,443 5,566
Capital expenditure (656) (546) (1,706)
Lease payments (479) (433) (992)
Free cash flow 2,561 464 2,868
f) Net debt / (cash) Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Cash and cash equivalents (3,658) (5,393) (5,631)
Interest bearing borrowings - Deferred contingent consideration - current - - 2,947
Interest bearing borrowings - Bank Loans - non-current 16,898 8,528 17,314
Interest bearing borrowings - Subordinated Loan (deferred consideration) - 2,106 - 2,014
non-current
Net debt (excl finance leases) 15,346 3,135 16,644
Interest bearing borrowings - Leasing obligations - current 761 786 920
Interest bearing borrowings - Leasing obligations - non-current 3,257 3,684 3,651
Net debt (incl finance leases) 19,364 7,605 21,215
g) Net leverage Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Net debt (excl finance leases) 15,346 3,135 16,644
Proforma(2) adjusted EBITDA(3) on a trailing 12-month basis
Adjusted EBITDA 4,436 3,325 8,962
Adjustment to increase adjusted EBITDA to trailing 12 month basis - as 5,637 4,660 -
reported
Adjustment to include mid year acquisition on trailing 12 month basis 1,391 - 2,110
12 month trailing adjusted EBITDA 11,464 7,985 11,072
deduct:
Lease payments for 12 month period (1,041) (840) (992)
Adjusted EBITDA for net leverage 10,423 7,145 10,080
Net leverage 1.47x 0.44x 1.65x
17. Post Balance Sheet Event
There are no post balance sheet events.
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