The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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We will all be happy if this makes them each £1m.
Good to see that those at the top are being dangled a carrot. Wonder what the conditional performance criteria has been set at.
Great to see a decent-sized buy from a non-exec too:
Https://uk.advfn.com/stock-market/london/venture-life-VLG/share-news/Venture-Life-Group-PLC-Director-PDMR-Shareholding/91427219
26.06.23 Non executive director purchased 100k share @ 38p.
Total holding 148.5k ordinary shares (0.12% of share capital)
Venture Life Group plc, a leader in developing, manufacturing and commercialising products for the international self-care market, hosted a capital markets event for analysts and investors, on 6 June 2023, senior executives, operational management and product champions presented.
Watch the video here: https://www.piworld.co.uk/company-videos/venture-life-group-vlg-capital-markets-day-6th-june-2023/
Or listen to the podcast here: https://piworld.podbean.com/e/venture-life-group-vlg-capital-markets-day-6th-june-2023/
Everything proceeding smoothly with no surprises - which is what we want to see after past hiccups.
VLG are confident about delivering in line with expectations. With the consensus of Cenkos's and Singer's forecasts being 4.92p EPS this year, that puts VLG on a current year P/E of just 8.2.
More worrisome if it was Randall….but still a loss of corporate knowledge and relationships with suppliers and customers will need further investment.
Sharon has a largish shareholding…..hopefully she keeps a good chunk.
The least they could do…..plough some of their Directors fee into shares aligning their interests with shareholders - that is who they are supposed to represent after all.
Thx re the IC article - apparently it's in today's print edition, which seems to have led to decent buying so far today with a net 133k or so of buys.
The buying price has now moved up from 40.65p to the current 41p full published offer price, which hopefully bodes well.
Indeed - particularly encouraging to see it's a non-exec spending a maiden £25,000 on VLG shares.
RNS - Non Exec Director BUYS 58,504 shares at 42.73p
Simon's updated his VLG tip following todays final results.
He draws heavily on the Cenkos research and concludes the article:
"In other words, the £49.5mn market capitalisation company’s forecast year-end enterprise valuation of £59mn equates to only five times cash profit estimates, or less than half the rating of peers. That’s a low multiple for a recovery play that is now benefiting from tailwinds and is set to de-gear its balance sheet, thus transferring more of the economic value in the entity from debt holders to shareholders.
The bottom line
So, having rated Venture’s shares a buy, at 28p, when I covered the half-year results (‘Nothing ventured, nothing gained’, 22 September 2022), and reiterated that advice at 36p (‘Investors are being too cautious with this self-care stock’, 11 January 2023), I feel that the shares, at 39.25p, have potential to double in value. Buy."
I've bought a few more and have managed to drag my average purchase price down a little.
Market reaction is very muted……I anticipated a bump up with the results….so am disappointed……maybe it is the Easter holiday effect?
Followed by the inevitable Vox Markets interview with our esteemed CEO...
(not forgetting that Vox Markets are on the "sell side" of the industry and always bullish)
https://www.youtube.com/watch?v=06uMclfNN8Y
Vox Markets comment this morning is very positive about VLG - and he doesn't mention Cenkos' forecasts of adjusted diluted EPS of 6.04p EPS this year and 7.19p EPS next year.:
https://www.voxmarkets.co.uk/articles/new-article-3365357/
"The analyst's view: Venture Life is back and fighting fit"
Conclusion:
"Broker Singer Capital Markets has a 84p a share target price, and is forecasting FY23 turnover, EBITDA and EPS to increase to £50.5m, £11.8m and 3.8p respectively. At the current 40p share price, that puts the stock on attractive valuation multiples of 5.7x EV/EBITDA and 10.8x PER, alongside producing an equity free cashflow yield of 14%.
These estimates appear readily achievable on a run-rate basis, especially since Venture Life delivered H2 2022 revenues and EBITDA of £25.1m and £5.6m. Even if simply doubled (which ignores seasonality and a potential rebalancing of distributor order sizes and a 12M contribution from HL, which generated 2022 revenues of £5m and £2m of EBITDA), that suggests 2023 consensus looks safe."
The data I found most interesting was the product sales list…..
The largest sellers were acquired after the big share issue and are justifying the deals…..then comes a block of “old VLG” which seemed to suffer badly last year down 20% or so…..whether these brands are in terminal decline or whether that highlights management focus on the new stuff is open to discussion…..I suppose it supports the view that the mcap reflects the recent acquisitions and old VLG is increasingly valued at near zero.
None of the products are what might be described as a blockbuster which means they have to run hard across the range…..they really need to get products with much wider appeal and higher annual sales
These are very acceptable results, but the market gives us no reward. I'm actually surprised the sp is still down in the 40's, let alone the 30's.... I mean, I remember selling some VLG for 48p back in Jan 2022, and the company is in much better shape today than it was then. Bizarre.
Hate AIM sometimes (well, often really).
Singer have now increased their target price by 16% to 84p.
The new consensus EPS for this year between Cenkos and Singer is 4.92p EPS, i.e a P/E of just 8.2.
I've long since given up on trying to reconcile the two brokers' adjusted EPS figures as they're so different, so best to use the consensus/average.
The consensus figure for next year is 5.64p EPS.
Excellent progress. VLG made 4.3p adjusted EPS - this is hidden away in Note 5, but should have been highlighted at the top of the RNS.
Most importantly, the order book is 114% ahead of last year and the outlook is very positive "with the momentum from a strong 2022 also continuing into 2023".
I've been intrigued by the seemingly innocuous phrase:
"Group leverage 1.4x at end of 2022 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 analyst coverage from Singers estimates a £8.5m adj EBITDA for 2022 and £14m net debt......
Well that is a 1.65x ratio so either the debt is lower or the profit is higher than that assumed by Singers.
For example is actual adj profits for 2022 is £10m and net debt is £14m then that's 1.4x.
Either way that's a surprise to the upside.... for Singers and Cenkos at least.
I've estimated using the HL run rate profit plus the VLG run rate operating profit that once again the 2023 numbers are simply too conservative versus what's happening on the ground. In the update 13th March it's revealed that the ratio has dropped to 1.3X as at 28/02/23 suggesting that 1X by year end pro rata we are looking at more like a ratio of 0.7X.
But this assumes a level run rate. We know that there's a growing order book, China, contribution from Earol. With a conservative 17% growth (as seen in 2022) an adj EBITDA/debt of 0.5x or lower.
But Singers speaks to an 2023 "equity free cash flow yield percentage" of 14.3%. Decrypting that Equity is £74m (as at 30/6/22) and 14.3% is £10.6m. So if that's true, FCF 2023 should drive the ratio to about 0.3x by end of 2023.
Whichever metric you consider, compared to current market expectations VLG appears to be cash generative, stable and paying down debt more rapidly than it is being credit for. It gives a potential war chest for further acquisitions but also the idea that dividends could follow. A 4p a share dividend (10% yield) would cost £5m a year. Affordable from FCF. I'm glad the business is paying down debt as debt is expensive (a £1.5m annualised finance cost using June 2022's numbers). But it does highlight the value to the current share price doesn't it?
GLA
Great update and read across Rivaldo
APH's prelims today indicate an extremely strong 2023 coming for Kelo-Cote, which should be good news for VLG:
"As indicated in the January trading update Kelo-Cote revenues are expected to build through the year, supported by strong end-consumer demand. The China Cross-border e-Commerce ("CBEC") B2B market for Kelo-Cote has shown early signs of recovery with in-market demand and sales orders increasing over the first two months of the year, and we expect total revenue growth for the entire Kelo-Cote franchise to be above 20% in 2023"
So VLG have confirmed there's no problem as regards SVB. The share price fell 4p on Friday due to speculation on this issue, yet has so far only bounced back 2p - and the trading commentary in today's RNS provides even more reassurance:
"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."
Useful RNS update….plus the news that HSBC has taken the SVBUK business under its wing will give stability.
As VLG owes SVB, there really is little problem, there will be no cash lost…..but the refinancing of the credit may be more expensive? The accompanying trading update was reassuring about the first two months and cash generation to reduce the debt…..nothing to see here folks.
Per the advfn board, apparently the company has debt facilities with Santander and SVB... which makes sense of Friday's drop.