Venture Life says it is seeing the “green shoots of recovery” with customers

Francesca Morgan
Vox Newswire
07:29, 17th May 2022

Venture Life Group (VLG Follow | VLG) says the year to 31 December 2021 saw “significant growth” as the group built its presence with two immediately earnings enhancing acquisitions during the year.

The developer, manufacturer and commercialiser of products for the self-care market reported growth in revenues and adjusted EBITDA despite its customers clearly feeling the impact of COVID which, in turn, affected revenues and product mix while input costs rose significantly.

During the year, Venture Life Group made two immediately earnings enhancing acquisitions, utilising the funds raised -£34.1 million in total - from its shareholders back in December 2020, which the company states has positively impacted the results of the Group in 2022.

Against this strong acquisitive growth, Venture Life saw a reduction in legacy revenues, substantially driven by COVID. In

FY21, revenues still increased by 9% to £32.8m, up from £30.1m in FY20 while adjusted EBITDA also rose by 8% to £6.6m, up from £6.1m in 2020.

The Company explained that despite higher revenues in FY21, the challenges on gross margin percentage meant minimal increase in the gross margin earned in the year compared to 2020, and tight cost control has helped to deliver an adjusted EBITDA margin of 20%.

Venture Life said it is expected that this percentage margin will increase in 2022 and beyond as we see the full year effect of the BBI & HHIC acquisitions alongside organic growth.

Due to the acquisition of BBI Healthcare in June 2021 and Helsinn Integrative Care Portfolio or ‘HICP’ in August 2021, respectively, the second half of the year saw total revenues from the company’s VLG brands exceed 50% of the overall revenue for the first time. Full year revenues from VLG Brands came to £17.9m over the period, up from £14.9m in FY20.

Revenues from VLG Brands represented 66% of revenues in 2H21 (vs. 42% in the 2H20), reflecting the impact of the acquisitions and delivering an overall share of 54% for the whole of 2021, compared to 49% in 2020, which included a significant amount for HSG, it reported.

Cash as at 31 December 2021 stood at £5.2m compared with £42.1m in FY20. While the company acknowledges that it has seen a material impact on its results from the acquisitions of BBI and HICP, Venture Life Group said it expects 2022 to see the full year effect of these.

Venture Life said it has seen an encouraging start to 2022, with its order book ‘comfortably’ ahead of the same time last year on a like for like basis, including the acquired businesses.

The Company said the current state of its order book reflects growth in the underlying business and the effect of customers supporting us by ordering further forward to help manage supply chain disruption and secure stock, giving it “greater revenue visibility.”

It highlighted that good commercial progress has already been made in 2022 to date, including the appointment of its new partner for the Chinese market, and customer price increases being put in place to further mitigate the cost increases seen during 2021.

While Venture Life Group has put in place procedures to address ongoing supply issues, it acknowledged that the current level of supply chain disruption is unprecedented and thus “cannot be underestimated”; it said its supply chain team is reacting daily to these changes.

Commenting on the results, Jerry Randall, CEO of Venture Life Group told investors: “2021 saw a year of significant growth for the Group, despite the challenges we faced. We are delighted to have completed two immediately earnings enhancing acquisitions that are now both integrated into the Group and performing well, and both showing growth over 2020.”

We continued to see the impact of COVID on our customers, in particular in the first half of 2021, but we are now beginning to see the green shoots of recovery with these customers.”

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Last month, Venture Life reiterated its guidance for the year ended 31 December 2021 and confirmed that its FY21 results would be delayed for a second time until early May 2022 as auditors experienced resourcing issues and required additional time to finalise their work.

Despite the delays, Venture Life Group reiterated to investors at the time that it expected to report an 8% increase in revenue for 2021 while adjusted EBITDA was also expected to remain in line with market expectations. The Company confirmed these forecasts today.

Venture Life Group, whose self care products are typically recommended by pharmacists or healthcare practitioners and are available primarily through pharmacies and grocery multiples, has seen momentum build as a result of the acquisitions of BBI and Helsinn, respectively.

In particular, these successful integrations have already been demonstrated by the group’s fourth quarter of the financial year where revenue was 59% above that in its third quarter.

Post-period, Venture Life Group announced that it had appointed a new partner, Samarkand Global, for its oral care products in China with shipments having already commenced.

Meanwhile, Venture Life also recently told investors that a leading health and beauty retailer in the UK had confirmed that they will launch its in-house developed product for rosacea in the UK and Ireland later in 1H22 with the product being marketed under the client’s own brand. Venture Life said this could pave the way for future collaboration with this large client.

In addition, another key UK health and beauty retailer will launch Venture Life’s Wart & Verruca Pen and Women’s

Intimate Gel in 2H22 under their own brand while other new agreements have also been recently completed for other products in other territories.

Addressing shareholders in January 2022, Jerry Randall, CEO of Venture Life said: “The acquisitions we made in 2021 are now fully integrated and have performed extremely well, contributing significantly to our strong growth in revenue and profitability in the second half.”

Randall acknowledged that 2021 had been a difficult year given the significant headwinds experienced. He added that

Venture Life had started 2022 with an order book significantly ahead of the same time last year, granting it “a good level of confidence” for the year ahead.

Follow News & Updates from Venture Life Group here: Follow | VLG

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