REG - Venture Life Group - Trading Statement

Venture LifeAnnouncement

31/07/2023 07:00

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RNS Number : 6426H  Venture Life Group PLC  31 July 2023

31 July 2023

 

VENTURE LIFE GROUP PLC

 

("Venture Life", "VLG" or the "Group")

 

Trading Update

Trading on-course to deliver full year results in line with market
expectations.

Venture Life (AIM: VLG), a leader in developing, manufacturing and
commercialising products for the international self-care market, announces a
trading update for the six months ended 30 June 2023 (the "Period"), ahead of
the expected announcement of the Group's interim results on 25 September 2023.

 

Headlines:

·    Group revenues for the Period of £23.5m, a growth of 24.4% over last
year, comprising growth from both the VLG Brands and Customer Brands,
including the recent acquisition of HL Healthcare Limited ("HLH"). On a
proforma(1) basis revenue performance was 10.4% ahead of H1 2022.

·    The newly acquired Earol product from HLH contributed revenues of
£2.3m (H1 2022: £2.2m), a growth of 6.1% over the previous year on a like
for like basis.

·    Cash generated from operating activities of £4.6m (H1 2022: £1.8m),
an increase of 158% over last year and improved operating cashflow conversion
of c.99% (H1 2022: 53%)

·    Group leverage(2) reduction to 1.4x at 30 June 2023 (31 December
2022: 1.6x)

·    Order book increase of c.30% since end of the previous year,
providing strong visibility over second half revenue and in line with
management expectations.

·    17 new listings secured with major retailers for Balance Activ, Lift
and Earol, including existing and newly developed products.

·    Further progress on digital transformation; online sales were 69%
ahead of the previous year at £1.6m (H1 2022: £0.9m) and accounted for 12.3%
of VLG brands revenue (H1 2022: 9.7%).

(1) Proforma basis i.e. if the acquisition had been in place for the whole of
the prior period.

(2) Group leverage calculated as net debt (excl. finance leases) and using
proforma Adjusted EBITDA(3) on a trailing 12-month basis.

(3) Adjusted EBITDA for Group leverage is EBITDA after deduction of finance
lease costs and before deduction of exceptional items and share based
payments.

Group revenues for the period grew by 24.4% to £23.5m and on a proforma(1)
basis revenue performance 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.

VLG Brands delivered revenues of £12.9m (H1 2022: £10.1m), a growth of 27%
over the previous year and accounted for 55% of first half revenues (H1 2022:
53%). VLG Brands include the acquisition of HLH on 30 November 2022 which
delivered revenues of £2.4m during the Period (H1 2022: £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 2022: £2.2m), a growth of 6.1% over the previous
year on a like for like 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, and revenues from Gelclair were 201% ahead
of the same period last year.

Customer Brands delivered revenues of £10.6m in the Period (H1 2022: £8.8m),
a growth of 20.3% over the previous year, driven largely by sales of newly
developed products to existing customers. These products are developed in
house by the Group's R&D team at Biokosmes and related revenues
contributed to c.10% of the overall Customer Brands revenue during the period.

Cash and debt

Cash generated from operating activities in the Period was £4.6m (H1 2022:
£1.8m), an increase of 158% over last year and operating cashflow conversion
improved to c.99% (H1 2022: 53%). Free cash flow was £2.9m higher than the
prior period at £3.4m (H1 2022: £0.5m) and has been used to support a gross
debt reduction of £3.3m and net debt reduction of £1.2m during the period.
As a result, Group leverage(2) has reduced to 1.4x as at 30 June 2023 (31
December 2022: 1.6x).

Outlook

As seen historically, revenues are weighted towards the second half of the
year and these are expected to be weighted more towards the higher margin VLG
Brands than in the first half of this year, as supported by the order book.
The Group's trading performance to date and the growth in its order book,
provide a level of visibility over second half revenue enabling the Board to
remain cautiously optimistic that trading for the full year financial
performance is on-course to be in line with market expectations.

Jerry Randall, CEO of Venture Life, commented: "I am delighted with
performance of the business over this first half, with strong growth
contributions in particular from Balance Activ, Lift and Gelclair, in the VLG
Brands portfolio, and from the Customer Brands. The acquisitions we made in
2021 & 2022 are now fully integrated and delivering good organic growth,
and we will be launching some great 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
excellent cash conversion and seen a meaningful reduction in our debt
position, having now paid the full contingent consideration for the
acquisition of HLH, and we expect this strong cash generation to continue
through the second half, further reducing our net leverage. 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."

 

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

Stephen Keys / Camilla Hume (Corporate Finance)

Michael Johnson (Sales)

 

Singer Capital Markets (Joint Broker)

Shaun Dobson / Alaina Wong  (Corporate Finance)
 
+44 (0) 20 74963000

Jonathan Dighe (Sales)

 

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.

 

 

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