TIDMVLG
RNS Number : 5222I
Venture Life Group PLC
13 August 2021
13 August 2021
VENTURE LIFE GROUP PLC
("Venture Life" "VLG" or the "Company")
Trading Update and Progress on recent Acquisitions
Venture Life (AIM: VLG), a leader in developing, manufacturing
and commercialising products for the self-care market, provides an
update on trading and the acquisitions of BBI Healthcare Limited
("BBI") announced on 7 June 2021 and the Helsinn Integrative Care
Portfolio ("HICP") announced on 6 August 2021 .
Trading
The Company expects to report revenues for the six months ended
30(th) June 2021 of GBP13.8 million. Revenues are less than those
reported for the first half of 2020 of GBP16.8 million, due to much
lower sales of hand sanitising gel ("HSG") and sales to our Chinese
partner for Dentyl. Outside of these two revenue streams, the rest
of the business showed overall growth of 9% (excluding the impact
of the BBI acquisition) over the first half of 2020, which pleased
the Board given the backdrop of another extended lockdown due to
Covid. Covid once again has had a heavy impact, which was seen
during this first half, but we are starting to see encouraging
signs of a post Covid recovery in retail in the UK especially. H1
2021 revenues did include a contribution of GBP1.1 million from the
acquisition of BBI in early June.
HSG delivered revenues of only GBP0.1 million in the first half
(2020: GBP3.2 million), significantly lower than in 2020 as there
remains significant levels of stock in the channel. There was panic
buying in Q2 2020 and what now appears to be significant
overstocking, which has not yet sold out through retailers. Whilst
we had expected HSG sales to be materially lower in 2021 than in
2020, actual trading so far is lower than our expectations due to
significant stock still being in the channel. This was an
opportunistic, yet meaningful revenue stream for us in 2020, and we
do expect some continuing contribution from HSG. However, the data
in recent months indicates that it is unlikely to be anywhere near
the 2020 levels in the future.
In addition, whilst we have also seen some sales to our partner
for Dentyl in China during the first half of 2021 (GBP0.2 million
vs GBP2.3 million in H1 2020) as well as the continued paying down
of a significant part of their debtor balance, sales out to this
partner so far this year have not picked up as we had expected. The
partner is still suffering from the effects of the Covid impact in
2020, and is not yet taking new product at the rate anticipated
when the agreement with them was signed in 2020 or indeed in line
with their communication earlier in 2021, which has likely been
exacerbated by the significantly increased shipping cost to China
now being seen. Whilst we expect more sales to this partner in
2021, and are hopeful that sales this year can at least match the
full year 2020 revenues to this partner, we are exploring all
options to maximise the value of these assets in China, where
demand for the product has been good historically.
The order book for the business (excluding any orders for the
China partner and the acquired BBI business) is higher than at the
same time last year, indicating good growth in the core business
during another extended period of lockdown across many markets.
BBI
The integration of BBI is progressing well, and the business
contributed GBP1.1 million to H1 VLG revenues. Since acquisition,
the integration of all aspects of the business has begun and is
progressing in line with our expectations. Before acquisition, we
had identified a number of cost synergies, which we are now
implementing and, in addition, we are already identifying further
revenue and cost synergies that we will seek to exploit.
BBI's most significant partner on the customer brand side is
Bayer Consumer Care AG, which distributes two key products in the
women's intimate health range, and it is pleasing to report that we
have deepened this relationship since BBI came into the Group.
Since acquisition, we have already extended the term of the
contract for the main product from 2024 to 2030, as well as adding
16 new territories. Furthermore, we have extended the territory
reach on the second key product from 12 countries to 51 countries.
This contract extension has further solidified and extended our
relationship, as well as brought new opportunities in new
geographies for both products. We look forward to continuing to
work with this partner through 2021 and beyond.
We continue to progress the process to achieve approval of a
further new women's health product in the USA and will update the
market on this in due course. This product is partnered with a
different major player in the space (following an agreement signed
April 2021), which will be selling it under their own well
recognised brand, and it has already launched in the UK (its first
market) in June 2021, as the product is already registered in the
EU. Under the agreement, our partner has the right to sell the
product in a number of other major EU countries, as well as the USA
and China.
HICP
HICP was only acquired very recently but this portfolio brings
the Group into another interesting new area, that of oncology
support. We have begun the integration of this portfolio into our
business, and this is made all the easier as we make two of the
three products already, and we know many of the existing partners.
No staff came with this acquisition, so our existing team has been
absorbing the business, with the addition of some limited
additional resource, as needed.
CPC clinical study
The clinical study at Cardiff University on our mouthwashes
completed in April 2021 and the results have been submitted for
peer review in key journals. We are hopeful to see the publication
of these results very soon.
Revolving Credit Facility ("RCF")
As announced on 21 June 2021 , the Group secured an RCF from
Santander Bank and Silicon Valley Bank to fund, inter alia, further
acquisition opportunities going forward. An amount of GBP4 million
was drawn at 30(th) June 2021 to replenish working capital and
secure funds to make the first payment for the HICP acquisition. A
further draw down will be made shortly to repay the debt with
Italian banks, a condition of receiving the RCF. This facility (up
to GBP30 million gross debt, plus an accordion of an additional
GBP20 million) gives us further funds for acquisitions in addition
to the ongoing cash generation of the business.
Outlook
The second half will have a more meaningful contribution from
the new acquisitions and the business is well placed to benefit
from the confidence that can be seen as the UK and global economies
recover from the impact of Covid. The Board is excited by the
growth opportunities available to the Group and looks forward to
reporting further delivery on its strategy.
Jerry Randall, CEO of Venture Life, commented: "I am pleased the
Group has continued to make progress during this prolonged Covid
pandemic period, not only generating good growth across many areas
of our business, but also by making two immediately earnings
enhancing acquisitions. The progress made this year along with the
acquisitions will contribute to another year of meaningful revenue
and profit growth for the Group, despite some negatives around HSG
and China. The acquisition of BBI has brought excellent products
into the Group in two novel areas for us, in addition to some new
blue-chip partners, who will be expanding the business in the
coming years. This is also expected to be the case with the HICP
acquisition. Our Chinese partner for Dentyl has made slower
progress recovering from the Covid impact in China than we had
hoped and is not progressing as well as we had expected by now.
However, they have been paying down their debt and started to take
delivery of some stock and, whilst we will continue to work with
this partner as we would all partners, we are reviewing our options
to make sure that the full potential for our products in the
Chinese market is achieved.
Finally, the completion of the RCF is a significant milestone,
extending the available non-dilutive funds for further earnings
enhancing acquisitions. The two recent acquisitions meaningfully
increase our expected profitability and cash generation in 2021,
where we will receive the benefit of the two new acquisitions in
the second half year. 2022 will see us receive the full year
benefit of the new acquisitions and, along with the continued
growth of our existing business, enables us to look forward to
significant growth in revenues and profitability next year. At the
same time, we have the resources to pursue additional earnings
enhancing acquisitions to accelerate this growth and the Board
looks forward to the future with confidence."
*Adjusted EBITDA is EBITDA before deduction of exceptional items
and share based payments
This announcement contains Inside Information
For further information, please contact:
Venture Life Group PLC +44 (0) 1344 578004
Jerry Randall, Chief Executive Officer
+44 (0) 20 7397
Cenkos Securities plc (Nomad and Joint Broker) 8900
Michael Johnson / Russell Kerr (Sales)
Stephen Keys / Camilla Hume (Corporate Finance)
+44 (0) 20 7496
Singer Capital Markets (Joint Broker) 3000
Jonathan Dighe (Sales)
Shaun Dobson / Alaina Wong (Corporate Finance)
About Venture Life ( 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
40 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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