REG - Venture Life Group - Update re Revolving Credit Facility

Venture LifeAnnouncement

13/03/2023 07:00

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RNS Number : 6624S  Venture Life Group PLC  13 March 2023

13(th) March 2023

 

VENTURE LIFE GROUP PLC

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

Update regarding Revolving Credit Facility

 

Venture Life (AIM: VLG), a leader in developing, manufacturing and
commercialising products for the self-care market, announces an update
regarding its Revolving Credit Facility ("RCF"), in the light of the recent
events at Silicon Valley Bank.

The RCF, which provides VLG with available borrowings of up to £30 million is
co-ordinated and managed by VLG's main relationship bank, Santander UK plc
("Santander"), and Silicon Valley Bank UK also participates in the RCF.

In light of the recent events at Silicon Valley Bank, the Group wants to
clarify the nature of its relationship with Silicon Valley Bank UK ("SVB"):

·    Neither VLG nor its subsidiaries (the "Group") has any deposits with
SVB either in the UK or the USA. The Group is therefore not dependent on SVB
to make payments to third parties and there are no funds of the Group at risk
as a result of any insolvency of SVB.

·    SVB is a lender under the RCF, and provides 50% of the funds drawn
under the facility.

·    The anticipated insolvency of SVB will have no impact on the term of
the RCF which is not due for renewal until June 2024; and will not result in
any acceleration of the repayments due by VLG under the RCF.

The RCF contains a mechanic under which Santander may take over the SVB
portion of the RCF (and also allows for another lender to participate in the
RCF). The Group has commenced discussions with Santander in relation to
Santander doing this, and those initial discussions have been positive.
Santander have indicated they remain fully supportive of VLG and of VLG's
plans to commence a refinance of the RCF given the expiry in June 2024. Those
plans will now be accelerated.

As set out in the Group's trading update on 31(st) January 2023, Group
leverage(2) at 31(st) December 2022 was in the region of 1.4x net debt to
Adjusted EBITDA(1) (31(st) December 2021: 0.4x) reflecting the impact of the
recent acquisition of HL Healthcare Limited (including the Earol brand).

Group leverage is expected to fall in 2023 to 1.0x or lower by the end of
2023, due to the cash generative nature of the business, now including the
highly cash generative Earol brand.

The Group's audited results for the year ended 31(st) December 2022 are
expected to be published around the end of the first quarter of 2023 and the
Group expects that these will be at least in line with market expectations.
Trading momentum has continued in the first two months of the current year and
the Group has seen strong cash generation as expected which has reduced Group
leverage to 1.3x net debt to Adjusted EBITDA. Liquidity is sufficient and
stable, and  the Board do not envisage any impact or risk to the business
arising from events at SVB.

Jerry Randall, Chief Executive Officer, commented: "The Group has had a strong
start to 2023 and seen very good cash generation off the back of strong
trading in Q4 2022, and is trading in line with our expectations. The
acquisiton of HL Healthcare Limited is integrating well into the Group and
contributing positively to EBITDA and cashflow. As stated the Group has no
deposits with Silicon Valley Bank, and so is not exposed to any deposit risk.
With the strong results in 2022, low Group leverage and strong start to 2023,
the Board is confident that it could comfortably refinance the Silicon Valley
Bank portion of its RCF either at the renewal in June 2024 or before."

 

(1) Adjusted EBITDA is EBITDA before deduction of exceptional items and share
based payments

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

 

 

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, 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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