Member Info for shandypants2

Greg, i feel your pain and i am also not happy with HC. I don't mind him selling some of his shares, but the timing wasn't great as he was in effect selling whilst telling people about the results.

I don't think this is illegal but as he was over hyped this share before and has been very good at giving good news and pretty poor at giving bad news (product delays etc) and the market has lost confidence in him and therefore as a consequence IDP. This clearly won't help to rebuild trust. He still owns 27% plus of IDP so he is hardly walking away.

However, HC is no longer CEO and in Kieran we seem to have a safe pair of hands. The products and deals are in place he now just needs to deliver whilst managing costs.

Incidentally not wanting to bash HC but in the accounts it did mention that loans of c400k were repaid in last FY so IDP has no borrowing now. These were predominantly to HC via his other companies so did he really need to sale the extra shares when he did?

I have held IDP for a few years now - the share price swing always seems excessive to me both up and down. I will sit this out and wait for sentiment to improve.
Incidentally FeverTree's (massively overvalued at c25 revenue and PE of c100 imho) owners have repeatedly sold over the last few years and yet the share price continues to move north regardless. The market is a strange beast

IDP is aiming for £14.4m revenue for the current FY and a profit of £1.6.
With the recent retail expansion into Boots and Tesco most people feel these figures are reasonably conservative.

Using a conservative 2x rev the share price is c£2 per share and with a PE of 20 that equates to £2.20. With the current share price that's about a 60% uplift.

Unless there is a RNS stating Roots will be in more stores we may need to wait until Jan 2019 for H1 progress so the share price might drift down slightly in the next few weeks, but if you think the rev and profit targets will be met sit tight. If not you are free to sell and move on.

Seanx - your Roots comments are just wrong.

The product clearly states 'reduces hair loss' it has never claimed to be a cure for baldness. Also as with ST , Roots is a repeat purchase product, if people didn't like it they would stop buying it. It won't work for everyone, hence the odd bad review but that's the same with all shampoos. I personally use it, and i have fine hair and it definitely makes it slightly thicker and more manageable. It takes a little while to get use to as it doesn't lather like other shampoos but the results for me were quite impressive. The leading shampoo in the UK has 'miracle' in its name and Boots best selling online shampoo claims to promote hair growth.
The HC share sale has spooked some people but the products are not the issue. Would Boots and Tesco (1st and 2nd largest Beauty Retailers in UK) stock this if they weren't happy?

Greg if Boots is selling c100 units of Roots online and if each store sells only 2 units each then that's 800 bottles a day.
at c£4 each that's over £3k for IDP - or £90k per month.

SD will be over £100k a month now so c£200k in total before Tescos comes onboard in Nov. Great progress

Good find Boon, an excellent summary and one i fully agree with. 2018 pain was mainly due to SD exclusivity and IDP is now much better positioned with 2 core products.
I personally think rev for year will be a minimum of £16m.

I have topped up again today (although it appears as a sell!!) and will do so if price falls further. I can't see how a positive H1 trading statement doesn't get this back to £2 plus

I wasn't happy with the timing of the HC share sell but he does still own c30% so he is clearly still committed.
In terms of the conspiracy theories surely he would have sold in 2017 when he was issuing 'best month ever for revenue' etc and the share price was over £3 - as a growing company this could be said now but he is being more conservative with RNS.

One slight concern is admin costs. These increased by c400k with 40 extra people employed - what do they do? With a new CEO his wages will now increase massively (earned less than £20k last year as non exec) and i doubt HC will take a reduction. With HC now focusing on Life Science he is earning more than this divisions total revenue!!

Boon, i do think FinnCaps analysis is a bit outdated TBH. In Aug they stated Roots sales were estimated at £0.3m for last year, 0.7m for this year and £1m year after. They stated this AFTER the Boots tie up but before year end results were announced.

Last year we now know that Roots sold £1m. I'm assuming £0.25m was sold in H1 and £0.75m in H2 so using H2 as a guide SD alone should generate £1.5m this year. With Boots added (maybe £1m) and then Tesco (maybe £0.5m) that's my £3m.

This makes no allowance for DTC and also extra Boots stores but best to stay conservative.

I think estimates might be upgraded if H1 results are positive (which will probably all be down to Roots increases as ST exclusivity is still in place).

BTW ST in Boots 5 per SKU seems low - if we go for 10 then that's £1.5m. A big impact on H2 revenues whatever the figure i think we can all agree

Boon - what is the initial £750k order from Boots relate to? Is it Roots or ST?

If it's Roots it will be in the H1 figures, as will Tesco as this goes into Stores in Nov.

If it's ST i think this is conservative. As ST goes into 1,250 stores i think the initial order could be £4m. This is based on 20 SUVs (ST has over 40 in total) and each store ordered 20 of each SUV at an average price of £8 (ST retails for £20 plus). So 1,250 x 20 x 20 x £8 = £4m.

So i've already stated that i think Roots sales will be a minimum of £3m this year (so a £2m increase on 2018) and just the initial order of ST could add £4m rev - so that would give IDP a £6m rev increase assuming all other areas remain unchanged. As you state Prolong could generate a bit (and Headmaster will get launched too) and surely overseas earnings must improve too so i am very confident the 2018/19 rev figures will be smashed.

yes never a dull moment with these shares.

I think the negatives in the end of year update were given too much focus and the positives somewhat ignored. Some people moaned that the rev was 10.7m and not the 11m as stated in June (agree it was slightly larger gap than expected) but ignored that the profit figure was slightly higher!!
The ST in Boots deal (and such a high number of stores too) has been completely overlooked for now but suspect in the next few weeks/months this may push the price higher.
Then of course the HC sale. When i first bought this share i did think it strange that the CEO has over 40% of the company (skin in the game is good but so many can start having a negative effect) so i have no issue with him selling a few and of course there will be times when he is unable to sell. However, both the May and last week's sale seem really ill timed and have not helped rebuild IDPs credibility.

Going forward we know that there will be no NPD (as stated by the new CEO) but there will be soft roll outs of Headmaster and Stevie K. The big focus will be on Roots and ST and as these account for over 95% of revenue that is clearly the way forward.
100% this company need to at a minimum hit the rev and profit targets for 2019 (£14.4m and £1.6m). Therefore the mid years in Jan are critical. Last year we posted £4.2m rev (up 31%) so i think we need another 30% on top of this (so c£5.5m). Hopefully Roots can provide most, if not all, of this as Roots sales this time last year would be very low as the product had only just been launched.
If IDP can give the market some confidence then we should see £2 a share again

yes the day after Prolong launch it did spike intra day at c£2.20 but finished the day down when HC's sell was announced.

Today has been almost as bizarre - it has appeared in top five rises this morning and finished the day in top 5 fallers. Only IDP!!

So in the short term the areas of concern in the results - slightly lower margins, Prolong issues, sales down in all areas other than UK etc have outweighed the positives - roots sales higher than expected and continued DTC progress, plus a reasonable cash position.

And of course there is the massive news re Boots stocking ST in 1,250 stores next year.

When Roots went into Boots i did say it is only a matter of time until the ST tie up is announced. Now that ST will be in 1,250 stores i think it's now only a matter of time before Roots store coverage is also increased.

This gives ISP clear revenue growth potential for 2018/19.

Roots from Nov will be in c1,500 stores and ST from March (peak tanning) will be in 2,000 stores.
So from this time last year Roots coverage will increase by 200% and ST will increase by over 150%.
This shows there are clear revenue drivers in addition to the steadily increasing DTC.

However, these increases will take time to materialise so the short termers will cash in and come back later. In fact i suspect some people sold this morning and bought back in this afternoon.

I'll just sit back and wait.

Following the Roots Tesco announcement last month FinnCap (IDP's house broker) re-iterate a short term price target of £2.20.

However, it appears they've estimated Roots contributing £0.3m year just gone, £0.7m this financial year and £1m in 2020. As results posted today showed revenue at £1m for a 10 month year and a start from zero these figures are massively out of date.

I strongly think Roots will contribute c£3m next year and possibly more if it expands into more Boots stores (surely target is the same 1,250 as ST).

This to me shows the £14m rev target is quite conservative.

Underpins current revenue forecasts. Our forecasts for Roots in FY 2019 are £0.7m,
rising to £1.0m in FY 2020, which compares with c.£0.3m in FY 2017. Given that Roots is
now ranged in all 779 Superdrug stores (up from c.500), these additional stores from
August and November (791 in total), potentially offer upside to our forecasts.
Forecasts and valuation. We are leaving our forecasts unchanged but recognise the
upside potential that Roots offers. We retain our target price of 220p, which implies a
calendar-adjusted 2019 P/E of c.22.9x, EV/EBIT of 24.1x and EV/Sales of 2.2x. Given our
2-year CAGR forecasts for revenues of 26% and c.100% for EBITDA and adjusted EPS,
we consider these premia to be justified.

Having just listened the Proactive video with new CEO and HC i think the market has yet to understand the significance of the Boots ST deal , perhaps because it won't happen until Feb/March next year.

Whilst Roots progress has been great ST is by far the biggest product and the SD exclusivity has hurt it in the short term (i know this has enabled product extensions and Roots launch etc, but share price etc has suffered).

If we assume ST UK sales are c£9m of which maybe £3m are via DTC. Therefore c780 SD stores have produced
c£6m revenue. If we said peak tanning season accounts for 1/2 of these sales that's £3m.

So getting this into Boots for peak tanning should conservatively generate an additional £3m revenue to mirror SD sales (could be more as in 1,250 stores vs 780 for SD but best to be conservative and maybe be a little decline in SD etc).

So i think ST in UK alone should contribute £12m this year.
Roots should do £3m
and other brands (C+L, plus Prolong and maybe Headmaster as launched early 2019) maybe £1m
That's £16m revenue and i think these figures are quite conservative and make no allowance for growth in other countries etc (which admittedly has been disappointing to date).

If Roots gets in more Boots stores and its DTC continues to increase etc i think £4m for Roots is possible.

CEO comment that Boots ans SD have essentially a UK monopoly on tanning products is key here, and Boots customers are usually a bit older than SD which is ST's main buyer demographic. There is also limited customer overlap. Boots customers are quite loyal - Boots reward card earns 4% for each purchase which drives loyalty etc.

The year after with a full year in Boots it is possible ST revenues alone could be c£15 to £20m (and i think current 2020 rev targets are c £20m for IDP as a whole).

http://www.proactiveinvestors.co.uk/companies/stocktube/10523/innovaderma-scores-massive-outcome-for-largest-brand-as-well-as-others-in-portfolio-10523.html

my take on the results are pretty much as i was expecting - we already knew that rev and profit would be so if anyone was surprised/disappointed they should have read the June RNS. I was hoping with the extended summer there might be a positive comment on start of 2018/19 trading but it is in line with management expectations, which while not negative is slightly disappointing.

Positives are that Roots has sold almost £1m - great considering it started from a zero start in Aug. With the brand growing all the time and retail outlets increased in SD, Boots and soon Tesco i can see this contributing c£3m in the current financial year.

ST DTC continues to do well and product range has increased. It would appear SD sales are reasonably flat for 2018 so growth has been via DTC. The Boots announcement for next year (probably released now to offset any negativity) is massive as 1,250 stores is big and there is little overlap between SD and Boots shoppers. This shows that Roots could also get in this number of stores too (so 200% increase on current levels) if sales go well.

Undoubtedly ST and Roots will drive revenue and hopefully profit this year. The £14m rev target looks reasonably conservative if Boots roll out goes ok.

On the negative US and Oz sales are both down from previously low levels which makes me wonder why we are even bothering at the moment with international expansion as IDP clearly struggle in this space and Prolong has had battery issues.
As Prolong launch was delayed by over 6 months this beggars belief - was this product not tested before being sold? A rev of £100k in 1st 2 months is ok, but it did get quite a bit of free publicity back in May so i think the jury is still out on this one.

Cash looks ok and stock levels whilst high are lower than mid year so this is ok too.

Short term i think share price might suffer as some people just focus on short term gains but over the next 6 months i can see this having a steady raise above £2 and i think revenue and profits will be exceeded but it is likely we will only know this in June 2019 (due to peak tanning season) at which point we might see £3 again.

I'm happy to wait 10 months and will continue topping up on any dips

unless some significant new contracts are announced soon LSAI will need another fundraiser. The £0.4m recently raised was partly to fund Verify so not all cash is for working captial.

Having monthly income of less than £50k whilst annual admin is in excess of £1m is clearly not workable.

Same as the location marketing concept is a good one. The pump before the last fundraiser was a classic. Expect a repeat in the next month or so.

greg, i love your positive updates and your tracking at Boots. I am very positive on IDP and this is my biggest holding by far, however, i have been here for a few years and was buying in the £3 range this time last year in anticipation that ST would be rolled out into Boots UK asap.

Instead IDP agreed a further 12 month exclusivity and this has without question damaged the short term growth and therefore share price.

Furthermore, we had the ASA slap, the Sept results then showed we had essentially run out of money and the inevitable large fund raise (at £2.76 followed soon after). Whilst Roots has been the one bright spark over the last 12 months i think every other launch date supplied by IDP has not been met, some by over a year.

Then we had the profit warning in March only a few weeks after HC told us he was confident of meeting year end targets. Then in June we have another profit warning with some rather strange reasons given for the reduction
(why mention US sales when they represent such a low % of overall sales??).

All of the above have had a negative impact on the share price.

Yes sentiment has improved and long may it continue but let's not pretend that things over the last 12 months have been great.

Incidentally Prolong was FDA approved when we purchased it - the delay in launching was nothing to do this obtaining this.

However, i do agree we are in a much better position than 12 months ago (more products, more distribution partners etc) , however, much of this was already factored into the £4 share price.

As long as next weeks numbers are as previously communicated and cash is ok a positive start to 2018/19 (hopefully as we had the best summer for years) i think we could see £2.50 next week. This would value IDP at £36m. This time next year it could be c£50m

using a P/E of 20 (slightly more conservative) based on next year's £1.6m gives a share price of £2.20 as there are now 14.5m shares in issue.

However, could next years rev and profit targets be exceeded as they seem reasonably conservative?

A Nov/Dec RNS stating that ST will be in Tesco and Boots from Feb 2019 plus more stores stocking Roots (as has been alluded to) will smash these figures.

Prolong expansion would help too

using a P/E of 20 (slightly more conservative) based on next year's £1.6m gives a share price of £2.20 as there are now 14.5m shares in issue.

However, could next years rev and profit targets be exceeded as they seem reasonably conservative?

A Nov/Dec RNS stating that ST will be in Tesco and Boots from Feb 2019 plus more stores stocking Roots (as has been alluded to) will smash these figures.

Prolong expansion would help too

Great rises the last week or so as the impact of Boots (was perhaps 'lost' within the profit warning RNS) and now Tesco is being digested. Remember SD is only the 5th largest UK health and Beauty Retailer - Boots is 1st and Tesco 2nd. This is very much a momentum share so lets hope it continues.

With all this talk re Roots's fantastic progress lets not forget that c90% of IDP revenues are via ST.

For 30/6/18 figures i expect ST to be over £9m and would be surprised if Roots has got to £1m (still great from a zero start in August - on Roots facebook IDP claim that they have sold over 100k bottles since launch).

Even with Roots expanding all the time - via all 3 retail partners and also DTC i would expect 2019 revenues to be c£3m to £4m so it shows how important ST is to IDP.

Now the SD exclusivity has clearly slowed STs expansion although the product range and DTC continue to grow so we are in a better position than this time last year.

My question is re the newly added Face range. I have to say i'm slightly confused by these products and wonder how they are doing. As a guy i'm not a big mosturiser or tanner but not sure if the 2 go together for a face range.
The body mosturiser (body glow) seems a obvious product extension but less sure re Face. Notice SD puts this with the self tanners and not the face mosturisers so take some of the current shelf space away from STs tanning products.

Has anyone tried it - does it work? Is it VFM?

hi Gregpeck, one thing i wasn't initially aware of is that although Roots is stocked in c360 stores via the online route you can get free delivery to over 2,200 stores so this opens up an additional sales route for IDP.

This perhaps also explains why online sales have been at decent levels almost from day 1 of the Boots deal - and long may it continue.

Re Roots performance in Boots, nipped into the large Boots in central Manchester and it took me a while to locate it in the shampoos as i think 4 types were stocked (SD has 9 or 10) and it was mid shelf (Alpecin was on shelf above) without any marketing display around it and the plain bottle doesn't help to attract your attention. So whilst Boots is stocking it they are not doing any advertising or positioning to assist IDP at this stage (this may come later if sales are good). At SD it is a top shelf product and has more products so the display is more eye catching.

However, on a positive i think the Boots demographic is older than SD and this is IDPs key customer base. HC said before that ST is very popular with middle aged customers and Roots is focused more on this age group anyway re fine, thinning hair (for both sexes).
Also think the overlap between SD and Boots customers may be low so SD sales may not be overly impacted.

Maybe more overlap with Tesco but still a positive to get it into a supermarket.

Incidentally whenever i'm in a store i always put a few Roots bottles in front of competitors to expand the shelf space and make it look more eye catching!!! Maybe all shareholders should do the same!!

https://prematureejaculation.help/best-premature-ejaculation-products/prolong-review/#experience

Found this above article regarding Prolong. It's on a premature ejaculation website (which has a discount code for Prolong - good idea!!) and is written by a sufferer. He appears to have tried a number of previous treatments but after 5 weeks Prolong had very positive effects. Clearly only a sample of 1 but a great review on exactly the right website.

Prolong could be a massive revenue generator fro IDP if they get it right . Even conservative sales of 1,000 units per month should generate c£2.5m a year and the US, Canada and Oz markets are huge.

Hopefully we will get an update in Sept