Venture Life Regulatory News (VLG)

1 December 2021

VENTURE LIFE GROUP PLC

("Venture Life", "Group" or the "Company")

 Trading Update & Board Changes

Venture Life (AIM: VLG), a leader in developing, manufacturing and commercialising products for the self-care market, provides the following update on trading and details of Board changes.

Trading update

Some of the themes that were referenced in the Company's Interim Results, announced on 23 September 2021, have continued. The integration of BBI Healthcare, the Company's largest ever acquisition, remains on track and the Directors are pleased with the progress that has been made. The Helsinn Integrative Care Portfolio, acquired in August this year, has also performed in line with management's expectations and is further evidence of the Company's skill in identifying and executing acquisitions well.

More specifically, through BBI Healthcare brands, evaluation is underway at both Savers and Co-op on Balance Activ. Also, given the success that Balance Active has had on the Amazon platform in the UK, plans are underway to launch the brand in Germany on Amazon, which is expected to take place in Q1 2022. 

In the Interim Results, reference was made to some of the challenges that the Group had been experiencing. These challenges persist; the ongoing impact of COVID continues to affect confidence across many markets, with some customers choosing to reduce inventory, rather than place new orders, and also to delay orders at short notice. The industry continues to experience increased input prices, not all of which can be passed on to customers immediately, along with supply shortages for some components, and the well publicised issues with truck availability / pricing have created additional uncertainty surrounding logistics. The Company's Chinese partner has continued to disappoint against expected levels of sales and, as a result, the Company is exploring alternative opportunities to ensure that sales in China are maximised in 2022 and beyond.

The Company continues to await the publication of the peer-reviewed in vivo study carried out by Cardiff University, which was completed in April this year. Whilst the Board is disappointed that this has taken longer than expected to publish, and does acknowledge that the timing is outside the control of Cardiff University, it is hopeful the final publication will be available soon. Further, the Company notes the recent announcement made by Salisbury Hospital regarding specific mouth care guidance for patients with Covid-19. As well as regular toothbrushing, the guidance also suggests that both Dentyl Dual Action and Dentyl Fresh Protect should be used. The Company understands this guidance was based on research conducted by Doctors at Salisbury Hospital, as well as the in-vitro (lab based) results widely published by Cardiff University in November 2020.

In summary, the Directors see many reasons to be optimistic and are pleased with how the Company is positioned, including its ability to react quickly to address things that are within its control. The Company is profitable, cash generative, with a healthy cash balance, and has a Revolving Credit Facility as a source of non-dilutive funding for selective earnings enhancing acquisitions, which it continues to assess. The Board, therefore, is confident that the Company is well placed to capitalise on opportunities that it believes will arise as a result of the current market conditions.

The Board expects December to be an important month of trading for the Group but confidence in predicting certain deliverables, particularly logistics, remains lower than normal. Whilst the Company believes that turnover for the year will be not less than £32 million (not less than £37 million on a proforma basis, assuming the BBI Healthcare and Helsinn acquisitions had been in place for the full year), the final outcome for 2021 will be determined by how these volatile issues conclude. Actions have been taken by the Board to mitigate the impact of some of the external factors affecting the Company and, with our products set to be launched in new outlets internationally next year and with our order book ahead of where it was at the same time last year (on a like for like basis), the Company continues to look to 2022 with confidence.

Board changes

The Company also announces that, after eight years as Chair of the Group, Dr Lynn Drummond is retiring from the Board. A process is underway to identify a suitable successor and we will update the market on this in due course. Lynn will continue to Chair the Board until that new appointment is made.

Lynn joined the Board of VLG in the autumn of 2013, and has presided over the Board through the flotation of the Group on AIM in 2014, and its growth through both acquired and organic means since then. The Group is now an established, growing and sustainably profitable consumer healthcare business, with operations in four countries and over 200 partners selling its products in over 90 countries. The Board of VLG would like to thank Lynn for everything she has done to support the management team of the business through this exciting period of growth for the Group.

In addition, the Company announces that Mr Andrew Waters, Chief Financial Officer, is leaving the business to pursue other business interests. He will remain with the business over the next six months in order to provide a smooth transition to his successor. Andrew joined the business in May 2019 and has supported the growth of the business in recent years, through three acquisitions and obtaining the Revolving Credit Facility. The Board would like to thank Andrew for his time at VLG.

The Company has appointed Mr Daniel Wells as Chief Financial Officer, and he will be appointed as a director of VLG as soon as practicable, subject to the approval of the Company's Nominated Adviser in accordance in the AIM Rules, and a further announcement will be made in due course. Daniel joined the Group in June 2021 as part of the acquisition of private equity backed BBI Healthcare, where he worked for the last two years in the role of Finance Director and played an integral part in the sale of the business. Prior to this, he spent ten years at a FTSE 250 company, Mitie Group PLC, in a variety of senior finance and commercial roles across the UK and Ireland, including as Divisional Head of Finance and later as Strategic Account Director for a major UK retail customer with revenues of over £50 million per annum. Daniel started his career in the private healthcare sector as part of the Corporate Finance team at Hazlewoods LLP in Cheltenham. He is a chartered accountant and a member of the AAT.

Jerry Randall, CEO of Venture Life, commented:

"I would like to express my deepest thanks to Lynn, who, after 8 years as our Chair, is stepping down, and is making way for a new Chair to join the business. With Lynn as Chair, since before IPO, we have grown the business into a substantial and sustainably profitable international consumer healthcare business. Lynn leaves the business with a firm foundation for future growth and I wish Lynn the very best for her future beyond VLG.

Andrew joined us in 2019 and has been with us through a period of growth, and through the tough COVID times, and I would also like to thank Andrew for his hard work and dedication here at VLG, and wish him well in his future endeavours.

I am delighted to welcome Daniel Wells as CFO to the business; Danny has made a very positive contribution to the Group already, since he joined at the time of the BBI Healthcare acquisition in June.

As we highlighted in September, and has been reported widely in the media, trading conditions at this time are challenging for many businesses. More pleasingly, we are beginning to see positive traction in passing some price increases onto customers, although this will take 12 months to fully wash through. Also, in the second half, we have had the strong impact of the higher margin acquisitions made in the summer, with both acquisitions performing well and in line with our expectations.

Despite the difficult trading conditions through COVID, the business will grow revenues year on year from 2020 to 2021 and we expect this growth to continue in 2022 before any new acquisitions. The challenging trading conditions mean that we are now more cautious about the levels of growth that we expect in the immediate future, but we are confident that our growing revenues will deliver growing profitability. We know that our resilient business is well placed to deal with the challenges of this COVID environment and is well placed to perform strongly when more normalised trading conditions return."

This announcement contains price sensitive information.

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About Venture Life (www.venture-life.com)

Venture Life is an international consumer self-care company focused on developing, manufacturing and commercialising products for the global self-care market. With operations in the UK, Italy, The Netherlands and Sweden, the Group's product portfolio includes some key products such as the UltraDEX and Dentyl oral care product ranges, the Balance Active range in the area of women's intimate healthcare, the Lift and Glucogel product ranges for hypoglycaemia, products for fungal infections and proctology, and dermo-cosmetics for addressing the signs of ageing. Its products are sold in over 90 countries worldwide.

The products, which are typically recommended by pharmacists or healthcare practitioners, are available primarily through pharmacies and grocery multiples. In the UK and The Netherlands these are supplied direct by the company to retailers, elsewhere they are supplied by the Group's international distribution partners. 

Through its two Development & Manufacturing operations in Italy and Sweden, the Group also provides development and manufacturing services to companies in the medical devices and cosmetic sectors.