SKIN.L Regulatory News (SKIN)

15 November 2018

Integumen plc

("Integumen" or "the Company")

Trading Update

The Company is pleased to announce the increased growth in product sales and contract test services at Labskin (Innovenn Limited, a wholly-owned subsidiary of Integumen plc).

With improved visibility ahead, the Company is on track to meet or exceed double the Group's revenues from the 2017 (£238,000) level. This is as a result of increased sales of STOER For Men skin products and the reduced marketing spend, leading to the current monthly break-even in the Skin Care division.

Major Restructuring:

Labskin, the trading name of Innovenn Limited, has undergone a major restructuring due to the acceleration of sales and services since H1 2018. A new website is now live at www.labskin.co.uk and reflects the new services being provided to its existing and new client base. Clients range from early start-up biotech companies to Fortune 100 companies with household name, health and cosmetic, brands.

Positive Results:

Improved revenue since July 2018 from Labskin has already been reported back in September as multiples of the entire H1 2018 reported sales (£49,000). Monthly sales continue to improve and further information on these improvements and expectation of where additional revenues are expected to come from are outlined below.

Artificial Intelligent Skin Care:

The recently announced collaboration with Venn Life Sciences Holdings plc and RinoLab, expected to go live shortly, delivers an integrated Artificial Intelligent product development platform for clients that allow validation of the impact of their product on the good and bad bacteria on human skin.

Balanced Microbiome Labskin Certified:

Confirmation of Labskin test results showing a balanced microbiome that contributes a positive outcome to skin treatment can now be certified for our clients' cosmetic and skin care products.

First Labskin Certified Range of Cosmetics:

STOER For Men, a skin care range of products owned by Integumen, are the first skin care products that have been certified as having a positive contribution to balancing skin's microbiome. They will be sold with the Labskin Certification. The low sales of STOER skin care products, with a high cost of sales, in H1 have improved in H2 2018. Monthly sales of STOER are at breakeven and expected to continue to improve into 2019.

Association of Labskin Certified Technicians:

Preparations are underway to roll out the Association of Labskin Certified Technicians (ALCT). Workshops and courses will commence in Q1 2019. Interest for certification already exists from our recent and new clients. These applied certified course programs serve to improve the expertise of our clients' in-house Labskin scientists, and increases the exposure of the Labskin brand test platform across the skin, health, topical drug delivery and wound care sectors.

New Appointments and Promotions:

Head of Labskin Operations:

Alex Chapman, has been promoted to lead an expanding team at Labskin. Alex joined Labskin in 2017 and was until recently General Manager of the Labskin team. This has now expanded in both production and tissue culture departments with a number of additional personnel since August. Labskin will add up to 40% more laboratory space in 2019 and Alex will also oversee external contract providers of third party-services which allows Labskin to provide a fully inclusive pre-clinical service solution to our clients.

Laboratory & Operations Manager:

Rupert Petch joins the Labskin team as laboratory and operations manager. Rupert worked as Project Manager for Fera Science Limited and its former company name of CSL (Central Science Laboratory) for almost 19 years. He is overseeing the expansion of the laboratory team and building on the solid foundation of quality controls to meet the highest standards required of our increasing client base.

Gerard Brandon (Chief Executive Officer) commented:

"In just the last 3 months the improvement of the Labskin and STOER Skin Care divisions have been transformational. Sales have accelerated and costs have reduced to breakeven in the skincare section. Labskin's new high margin services have seen higher demand with improved revenues from cosmetic, skin, health and wound care companies. There is good visibility of orders for the months ahead. Recent collaboration partners allow Labskin to roll out new products and value added services faster to our existing and new clients. This boost in sales has resulted in a need to add team members to support the increasing demand."