The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Hi, yes up c10% now so hopefully some news soon. looking at 1/2 year report we should get news on headmaster/Hair launch in US, Enbright in Asia (although this was meant to have been launched in 2017 so I'm not holding my breathe), prolong in UK and continued roll out of ST and Roots. News on Stevie K would be good as I suspect we have a lot of stock for this as it was due to go into SD before the exclusivity issue surfaced. .I did wonder with the timing of HC's share sale (still has 34% so I'm not too worried) 2 days after Prolong launch whether there is no more good news in the short term pipeline, although I'm happy to be proved wrong. DTC sales seem to be steadily increasing and SD still has good stock space including the new products. So hopefully year end revenues will be c�12m rather than the �10m that some have predicted. We really do need some numbers though as without �� how can IDP expected to be taken seriously. I still think IDP is valued as a 1 product company which is clearly is not, however, we have never been given any Roots revenues and Prolong could by year end have say �2m revenue or �20m revenue, we just have no way of estimating this. Also a quick comment on cash burn. At half year there were concerns that the �4.4m placing was only �2m at 31/12/17. A the time I did point out that stock increased to by �1.6m to �3.6m (very high for such a small company). I also notice there was a �500k charge on the accounts associated with this fundraising called "transaction costs for shares issued". Not sure what this is - it was not paid for the previous fundraising in 2016. However, adding this to the increased stock figure gives a net cash burn of c300k, which is more than acceptable.
yes, I'm currently working on a GDPR project for one of the big 4 banks. This changes how you market to customers and consent is now key. How will LSAI obtain customer consent??
agree - sold yesterday at a loss. No numbers is always a warning sign and I think GDPR could have a massive impact too. When they make statements like " operating at our lowest cost base" etc it is slightly misleading as previously there was a massive cash burn. Yes savings have been made, but are they enough?? I expect another placing soon
good for your missus. However, if you look at our competitors all seem to get products on shelves at a much lower price (yes I know economies of scale). Similar tubs are on sale for a fiver. Same with ST (highest priced fake tanner by far) and also Roots - a great product but double the price for 1/2 the size bottle. This will restrict sales and growth. For ST and Roots it's repeat purchasers that will drive the revenue. Let me know if your missus continues buying p.s how are you getting on with Prolong? Hope its working for you
whilst I still think this is �100m company in the making (ST valued at �30m, Roots and Prolong similar and then maybe enbright etc can come to market and do well - and that puts no value on other brands) without any rev and profit projections this share will go nowhere. If the company cannot issues forward growth predictions how can anyone else? We are now in the core quarter for sales yet there is radio silence. This will be interpreted poorly. Whilst Prolong launch (finally) is a positive sales could be say �2m per year or �20m - we have no idea how popular this will be (although clinical trial results are impressive). Similarly additional ST and Roots product extensions are positive, but �20 for a small tub of bum moisturiser - this is massively over priced. Short term we need an update on current sales - if sales are still growing as was stated in March RNS let's see some numbers. We need a new UK retailer tie up asap - HC needs to get this over the line asap. Whilst I quite like HC he has damaged IDP by over promising and under delivering (Steve K was meant to be in a UK Retailer in Q1 - this hasn't happened and yet no announcement) and the recent share sale hasn't helped - the timing 2 days after Prolong announcement looks questionable to me and contributed in a massive price fluctuations. Come on HC give us some good news
IDP has not updated profit or revenue forecasts since its March 2018 trading statement which is clearly having an impact on the share price. 2017 results showed revenue increasing c100% to �8.9m with a profit before tax of c�1m. 2018 was forecast at �13.9 m rev and 2019 at �19.9m. H1 2018 showed a 31% increase in rev from �3.1m to �4.2m but HC reiterated that the year end target was still achievable as revenues were 2nd half weighted. I had my doubts as H2 last year was �5.7m. Only a month later we were told the year end rev target wouldn't be reached and the profit (c�2.5m) would now be in line with last year so c�1m. No updates has been provided since. So yes the revenue is still growing albeit at a lower rate but it shows the issue with the SD exclusivity - ST is already in all 790 stores so sales increases are limited. Therefore other products are required and these have all been delayed, with the exception of Roots which the company states has had a dream start (although no sales figures have ever been released). Now clearly SD have played hard ball with the exclusivity and this seems to be the reason why Stevie K has not been launched in the UK. However, SD will clearly still sell ST (and Roots) if there is demand and this seems to be progressing quite well. The fact that 3 new ST products (bum booster, body glow and after sun) are already on SD shelves gives me a level of comfort that sales are progressing ok. Shelf space has been maintained too including the top shelf. DTC seems to be steadily increasing too which is important too as this increases user base and margins are much higher. Some have predicted a �10m rev for year end, I am hoping for c�12m. The big drivers for future rev are IMHO: new UK retailer tie ups (ST and Roots) Expansion of both into other countires (especially Roots as everyone uses shampoo, ST seems more UK focused) Prolong sales takes off (10k units would generate �3m sales) Embright in Asia gets off the ground (this is a massive market so could become our No 1 product) Stevie K gets a retail tie up (either UK or Oz) Hair/Headmaster must be close to launch soon in US but not sure about this product so not sure what impact it will have. So unless we get announcements on UK tie ups and product launches it is difficult to predict future revenues.
sorry typo - 40% not 405!!!
really don't understand the big fall today unless news has leaked. Think the post Prolong announcement share uplift was overdone so maybe this is a reverse. With so few shares and with HC having over 405 of them these swings are not uncommon. ADVFN reporting confusion with a pill made in Bangladesh called prolong (not our prolong - ours is a patented plastic massager) which may have unsettled a few. Whilst we do need updated sales forecasts things seems to be slowly building on the ground. In SD both the new bum booster and the ST glow are now in stock (although at �19.99 seem quite expensive against other brands) and ST still demands decent shelf space including top shelf display. With the after sun ST that was added a month or so ago that's 3 new products tot he ST range in last 4 weeks. Roots continues to grow too which is also encouraging. If roots SD exclusivity runs out end of July (think ST may be end of 2018, but could be wrong) then there could be a retail deal announced any day which would have a very positive impact on the share price. Incidentally SD exclusivity is limited to UK retailers only. Someone mentioned Amazon sales - this is fine as on line only, we already have an on line presence with a number of retailers e.g ASOS and we are fine to do retail deals outside UK as we have done recently in France and Ireland. However, as UK is 90% of sales it is by increasing UK retail presence that will drive the share price upwards.
Hi, IDP is due a trading update and previously it has used these to announce new product launches and new distribution deals. Having said that a big tie up with say Boots UK would surely be a standalone RNS. IDP has missed many of its own dates for launches so I think is being more conservative now (e.g Prolong and initially to be launched before end of 2017 and we got the announcement in early May 2018). There are factors for these delays - manufacturing is clearly a constraint and sometimes these timings are out of IDPs control. Additional HC has mentioned that they are being more careful since the ASA warning and ensuring all claims can be validated - I notice recent Roots bottles now say "reduces hair loss" rather than "hair growth", and personally I was surprised to see the latter in he first place as it is clearly not a cure for baldness. Having said that it's a great product and my hair definitely feels better since I've started using it. �2m cash may not be too much of an issue BTW. IDP raised �4.4 last Oct and at 31/12/17 had just over �2m left in cash. However, stock increased from �2m to �3.6m so most of the cash has gone into stock (which is valued at cost not sale price and IDP mark up is c100%). Now we don't know what this stock is (guessing some of this increase is to get Prolong ready for website launch etc and also best selling product ST, so if SD orders have slowed we can use stock levels to meet demand). We do need more info on this though as �3.6m stock is a lot for a company with c�10m turnover. My concern with stock is Stevie K this was the make up brand which was going to be launched in a UK retailer in Q1 2018. Clearly this was SD and it hasn't happened, almost certainly due to them playing hard ball with exclusivity. We increased the product range at SDs request so we could now be sitting on large stock levels and only a DTC platform to sell it. We definitely need a retailer for this product asap - either UK or Oz. Hair/Headmaster helmet is probably the most expensive product to manufacturer and this was also meant to be launched by now so stock levels could be high here too. Embright in Asia (skin lightening product) has also repeatedly been delayed. Was launched then not, was being repackaged and now who knows!! Asia is a massive market and we have a tie up with a retailer so just need to get this on the shelves asap. Currently we are still considered a 1 product 1 country company (ST sold in the UK). Even with this we should be valued at �30m based on �10m annual revenues. I don't think Roots has been factored into share price and the recent movement based on Prolong announcement shows that people don't understand Both Roots and Prolong could be bigger sellers and Prolong is being sold in US and Oz. Embright and Hair/Headmaster will further add to portfolio and geography spread. But for mw the biggest
Burn you do make me laugh. last trading statement (march 2018) HC said we wouldn't meet year end projected revenue figures as SD had not ordered as much ST as was expected - still could be growing but at a lower rate. You only need to go into a SD store to see that there are now 5 or 6 tanning products all competing for the same shelf space. As for the last placing Prolong was purchased in May 2017 so it has taken a year to get this off the ground. Much of the placing money was focused on Prolong e.g at H1 figures stock levels were up to �3.6m - I suspect much of this was Prolong so IDP was geared up for the launch. Yes, it's great the market has now seen the potential of this product and hopefully the company but it's hardly been a trade secret
http://www.innovaderma.com/wp-content/uploads/2017/05/Acquisition_of_Prolong_Presentation.pdf Hope this link works. IDP presentation from 2/5/17 taken from their website. Happy for someone to do the numbers!!!
Life Sciences In May 2017, we acquired Ergon Medical Limited, the owner of the intellectual property rights of Prolong�, the world�s only medical device for premature ejaculation cleared by the U.S. Food & Drug Administration (�FDA�). Prolong� can be sold without prescription, is patented in 72 countries and ready for mass-market distribution. The Company is currently finalising its launch strategy for Prolong� for the US and Australia and has also started receiving interest from distribution companies in Europe and Asia. The Company remains confident of creating a successful launch strategy and in positioning the brand as a highly effective, world leading and side effect-free treatment option for a problem affecting one in four men globally.
IDP bought this product last year. It was being sold in small numbers previously and all the clinical trials relate to the previous creators. All this is covered in previous RNSs and clearly that's why we purchased it. IDP said they would launch this in Q2 2018 in US and Australia via DTC and they have now done so. Why has market responded so positively? Clearly the previous purchase wasn't priced in (I don't think Roots potential is also priced in yet IMHO) As with a small company with a low number of shares in circulation when good news comes it is over blown and conversely bad news is also overdone. I think the reaction of both the ACA wrist slap and the recent revenue target miss have been overdone so a correction was always likely. Missed targets have also clearly not helped. However, I also think HC meeting a previously announced target is being interpreted positively. Prolong is not a mystery product it has been around for a few years and IDP has paid a decent price for it �1m upfront plus a % of sales). However, it is ideal for DTC and in the UK alone supposedly 7m men could benefit from it. The figure in the USA must be c50m men.
http://www.dailymail.co.uk/femail/article-2521334/New-Prolong-gadget-claims-beat-premature-ejaculation.html Ideal for DTC, big mark up, patented technology and great clinical trial results. Surely this should be a big revenue earner very soon. market is massive although no repeat purchase options unlike shampoo etc
as I typed RNS re Prolong released - maybe I was a bit premature with my posting!!!
According to ADVFN HC should be updating the market this week - maybe that's the reason for the small spike. As we have no forward ��� from the company it is essential the market is given current and future guidance else we just look like another small, unprofessional start up (which I don't think we are). As all the bad news seems to be priced in and more hopefully some positive sentiment will reflect well on the share price. ST still seems to be well stocked SD and has 275k FB followers. There have also been a couple of new ST products too (after sun etc) so i don't think it's all doom and gloom. Remember HC had to report the SD slow down as he had predicted 70% H2 growth in order to reach year end predictions. Just because these numbers aren't achievable doesn't mean revenues aren't increasing, just at a slower rate. Roots continues to grow, albeit from a low base and FB followers are rising steadily. Really need news on another UK retailer for ST and/or Roots and Prolong launch - we've been told this will be Q2 so let's hope this doesn't get delayed. HC need sot start re-building credibility - both of himself and the company. Hopefully it starts tomorrow!!! I'm still positive but have learnt a harsh lesson - never fall in love with a share.
agree - really need some positive news and asap. Prolong (spent �1m on this, has excellent clinical trial results and ideal for DTC) is to be launched in Q2 2018. Well we are in Q2 now so let's get this out in April and no June. If we didn't want to extend exclusivity with SD then surely other UK retailers must be wanting our products so get these deals announced. There are still massive short term challenges which will impact the share price 1) �3.6m stock at H1 - very high and hopefully we can get this down in Q2. 2) concerns over cash burn - we really need to avoid another placing 3) what happens to Stevie K if SD not going to stock it 4) no updated rev or profit guidance - as SD sales are c60% of overall revenue it might be difficult to estimate this but surely some guidance is better than none On a positive went into SD and ST is still well stocked and doesn't appear that shelf space has been reduced and new ST after sun product is now in stock Roots seems to keep growing too - 12k facebook followers up from 10k in a few weeks and better DTC offers coming through - 3 for 2, free postage etc so this should drive sales. Also noticed the new bottles says 'reduces hair loss' rather than 'hair growth' which is better as the latter just confused me as it clearly isn't a cure for baldness.
according to chat on ADVFN exclusivity for all products might be July 2018 so that would appear to be why SD are playing hardball now in the hope this will be extended. Suggestion is that they may have backtracked on stocking Stevie K which is a massive disappointment. Clearly HC wants ST (and Roots) in other UK retailers asap. Anyway, popped into my local SD to see if I could see any differences. ST display does look slightly smaller and the top shelf advertising display is no more. Looks like St Tropez and something called Fake Bake are really pushing their products and maybe with limited shelf space we have lost out a little, hence the revenue warning. However, if you like ST it is still stocked and quite easy to find. On a positive I did notice that Body Glow is now more prominently displayed and there is a new addition to this range and Roots continues to be top shelf and well stocked. In fact not only are all the old Roots bottles now gone so only the slicker thinner bottle is available there is also a 3 for 2 promotion on Roots. I think this is the first promotion SD has ran for Roots. This is a unisex shampoo so there is no excuse for not buying now!!! Not sure if this offer is also available via DTC but on the roots facebook page there is a free P&P voucher code at the moment.
very disappointed with this announcement as it was only last month they re-iterated year end numbers, despite them always looking ambitious. A year end revenue of say �12m is not a disaster as it's still a decent increase from �8.9 for period ending June 2017. This will still represent good year on year growth. So where do we go from here? HC needs to start posting actual figures - not vague comments about exceeding management expectations, for example how much is Roots currently selling? No one knows. He has repeatedly told us new products will be launched and then these dates slip. Stop over promising. Prolong was meant to be in US by end of 2017, Stevie K in a UK retailer Q1 2018 and Skinny Tan in France same timescale. We are now in March 2018 and none of these have happened. Get these products to market as and when you can in a cost effective manner and tell us what that strategy is. Prolong is perfect for DTC so why the delay? SD exclusivity - Roots is until July 2018 and ST Dec 2018. Neither of these should be renewed. SD is the 5th largest Health and Beauty retailer in the UK. Getting into Boots etc would have a transformation impact on the company. Finally don't get too downhearted, the fundamentals for this share have not changed.
Now we are in March I think IDP should be ready to update us on progress re roll out of new products and expansion of existing products as this share needs some positivity. Also, some news on sales for Feb 2018 would be good as if Roots continues to make the progress it has in the last two months then Feb figures should be quite good (and they need to be if IDP is to reach year end targets). Although probably one for next financial year look at this article in the Mail re Prolong. IDP spent over �1m on this so they must have big plans for it. Appears to be ideal for DTC sales (let's face it you wouldn't buy this in a shop!) and gross margin must be very high too. Although it's not a repeat purchase product sales potential must be massive and could dwarf ST. 70% last 11 times longer in a clinical trial (not up to 11 times, but 11 times) is very impressive. http://www.dailymail.co.uk/femail/article-2521334/New-Prolong-gadget-claims-beat-premature-ejaculation.html