Venture Life Share Price (VLG)

I doubt anyone here is holding for a dividend.

Buying new product and extending brands is the name of this game. Pay cash, take on debt, bring the debt down. Repeat.

Not sure if paying off debt first would be more beneficial, before paying dividends

A move to the main market could be beneficial to the share price, would then appear on the radar of more investment fund managers.

Yes, this share seems to have everything going for it right now, except a divi but if this they can deliver on the growth then I guess it doesn’t matter.

Cavendish's latest research from earlier this month hasn't been posted here yet in detail.

They have a 68p target price, and they forecast 5.5p EPS this year rising to 6.9p EPS and then 7.9p EPS.

Here's some extracts:

"Strong organic growth; focus on EBITDA

Venture Life has reported FY23 results to December 2023, following the February trading update. Revenues grew 17% in the year to £51.4m (our est. £50.7m) and adjusted EBITDA was £11.6m (our est. £11.6m). Cash conversion was 85%, generating £9.8m of cash from operations. Cash generation and no M&A in 2023 allowed the company to de-lever, closing FY23 with net debt to adjusted EBITDA at 1.3x.

Management have focused on growth with three therapy areas generating double-digit revenue growth and online sales up +40%. Our extended forecasts anticipate increased investment, developing new products and expanding distribution channels to drive future revenue growth, with a focus on EBITDA and cash generation. We believe Venture Life has delivered strong organic performance in 2023 and anticipate on-going growth which could be complemented by re-starting the M&A strategy."

"Cash – The company generated cash from operations of £9.8m (FY22: £6.2m), indicating cash conversion of 85%. FCF for debt servicing was £4.8m, up strongly versus £2.8m in FY22. Strong cash generation and no M&A in 2023 allowed the company to deleverage, closing FY23 with net debt to adjusted EBITDA of 1.3x (FY22: 1.65x), which has subsequently fallen to 1.15x."

"Outlook – We note Venture Life’s stated commitment to improving EBITDA margins, that, while lowered in the near-term, are expected to benefit from marketing investment. This reflects a focus on profit and cash generation across all revenue streams, generally regardless of the differing gross margins. We expect this focus to support profit and cash growth for the business.

Investment thesis – Venture Life has delivered an organic 2023, demonstrating its ability to grow revenues and generate cash, allowing the company to de-leverage. We believe the company exited 2023 in excellent shape, noting a diverse product portfolio with further organic growth opportunities, available manufacturing capacity for expansion into new opportunities and a stronger balance sheet to re-engage its M&A strategy."

They also "expect the company to re-initiate its acquisition strategy during 2024 and beyond", and "as of the end of FY24E, based upon our forecasts of the current business, Venture Life would have £16m of the initial £30m RCF available, plus the potential to draw a further £20m".

Under different scenarios this could add between a further £2.5m-£7.5m of EBITDA to current forecasts.

Yep, breaking upwards nicely now. Hopefully soon to attack the early '23 levels of 45p-46p and then to move on up to 60p or more.