REG - Venture Life Group - Trading Update

Venture LifeAnnouncement

25/07/2022 07:00

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RNS Number : 5251T  Venture Life Group PLC  25 July 2022

25 July 2022

 

VENTURE LIFE GROUP PLC

 

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

 

Trading Update

Trading in line with management's expectations for the first half and
confidence in full year outlook

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 2022. The Group expects to
release interim results in September.

Overview

The Company expects to report revenues for the six months ended 30 June 2022
of £18.9 million, a growth of 36% over the same period previous year.  This
is reflective of the impact of the recent acquisitions of BBI Healthcare
Limited ("BBI") and Helsinn Integrative Care Portfolio ("HICP") (together the
"Acquisitions") aswell as a difficult prior year comparable.

Key Highlights:

·    Group revenues of £18.9 million, a growth of 36% (35% on a constant
currency basis) over last year and reflecting the impact of recent
acquisitions;

·    The Acquisitions contributed revenues of £6.3 million (H1 2021
reported revenues £1.4 million);

·    Group gross margins and adjusted EBITDA margins improved by 4ppts and
3ppts respectively over the same period in the prior year;

·    Cash inflow generated from operating activities of £1.5 million (H1
2021: £0.7 million outflow);

·    Net debt before finance leases reduced to £2.6 million (Dec: £3.2
million);

·    Net debt after finance leases reduced to £7.2 million (Dec: £7.5
million); and

·    Order book remains strong and is ahead of the same period last year
as customers place increased focus on ensuring security of supply.

 

The Acquisitions delivered revenue growth of 10% and 6% respectively on a like
for like basis. Outside of the Acquisitions, the revenue performance over the
remainder of the business was 1% ahead of the same period last year, driven by
growth from customer brands, which, given the second half weighting of
 international revenues is in line with management's expectations.  Whilst
COVID-related lockdowns in Shanghai impacted first half performance from our
new Chinese partner, the restrictions are now easing and as such we continue
to expect our new partner to begin to realise the potential for our products
in the Chinese market.  Nonetheless we remain mindful of the risk presented
by China's stance on Covid.

Including the Acquisitions, and on a proforma basis, the overall revenue
performance of the Group was 4% ahead of H1 2021 which, the Board believes,
highlights the resilience of Venture Life's products through the cost of
living crisis and the increasing importance of selfcare to consumers.

Outlook

Although we remain mindful of the changing and challenging economic backdrop,
there are signs that the supply chain issues have plateaued. The team are
continuing to deliver the margin protection strategy through robust cost
management and by sharing cost increases with customers wherever possible. The
current order book strength is enabling supplies to be purchased cost
effectively and in sufficient time to produce. The first half percentage gross
margin improvement demonstrates both the accretive impact of the Acquisitions
plus the progress made in mitigating some of the adverse impacts faced from
increased input costs. Pre-identified cost synergies from the Acquisitions
have been secured as expected and support an overall improvement in adjusted
EBITDA margin percentage.

The order book remains strong and is ahead of the same time last year,
including the recently acquired businesses. As seen historically in the Group,
revenues are weighted towards the second half of the year and these are well
underpinned by the current order book strength. Based on trading performance
to date and visibility over second half revenue, the Board is confident the
Group is on course to deliver full year financial performance in line with
market expectations.

 

Jerry Randall, CEO of Venture Life, commented: "The Group has delivered
revenue growth in the first half primarily through the Acquisitions. The
challenging retail environment continued in the first half, but I am delighted
to see that, notwithstanding this, a number of our own brands, as well as some
customer brands, have demonstrated strong revenue growth in the period.  The
margin improvement seen versus 2021 is particularly encouraging, and customers
have been very responsive to our request to order further out than their
normal lead times, enabling us to both ensure supply of raw materials and
packaging in time to produce, and manage costs. The supply chain environment
continues to remain challenging, but the team has done a great job in managing
this in the first half and will continue to do so in the second half.

As is normal our revenues are weighted in the second half of the year, and
this will be the same for 2022, supplemented also by some orders that moved
into H2 as a result of supply chain timings. The unlocking of Shanghai should
allow our new partner to begin to market our products there, but these are
early days and we continue to monitor the situation.

The progress to date and the order book in hand mean the Board is confident
the Group will deliver financial performance in 2022 in line with market
expectations."

 

*Adjusted EBITDA is EBITDA before deduction of exceptional items and share
based payments

 

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)

Russell Kerr / 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, 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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