TIDMVLG
RNS Number : 4378N
Venture Life Group PLC
25 September 2023
25 September 2023
VENTURE LIFE GROUP PLC
("Venture Life", "VLG" or the "Group")
Unaudited interim results for the six months ended 30 June
2023
Venture Life (AIM: VLG), a leader in developing, manufacturing
and commercialising products for the international self-care
market, is pleased to announce its interim results for the six
months ended 30 June 2023 (the "Period"). The Group has delivered
another half year of growth and development across the whole
business, along with the integration of the HL Healthcare business
acquired in late 2022. Strong cash generation has been a theme of
the first half, reducing Group net leverage(1) to 1.47x, from 1.65x
at 31 December 2022, with the contingent consideration of GBP3.0m
for the acquisition of HL Healthcare ("HLH") paid in full during
the period.
Financial Highlights
-- Group revenue increased 24.5% to GBP23.5m (H1 22: GBP18.9m)
-- Adjusted EBITDA(3) * up 33.4% to GBP4.4m (H1 22: GBP3.3m) and
adjusted EBITDA(3) * margin up 1.3% to 18.9% (H1 22: 17.6%)
-- Operating profit before amortisation and exceptional items*
up 40.9% to GBP3.3m (H1 22: 2.4m)
-- Loss before tax increased to GBP1.3m (H1 22: GBP0.2m) as
anticipated, reflecting higher amortisation and finance costs
versus the comparative period
-- Cash from operations up 131% to GBP4.1m (H1 22: GBP1.8m) and
free cashflow of GBP2.6m (H1 22: GBP0.5m)
-- Underlying cash from operations* up 159% to GBP4.8m (H1 22:
GBP1.8m) and improved cash conversion* of 108% (H1 22: 56%)
-- Net debt reduced to GBP15.3m with Group net leverage(1)
commensurately reduced to 1.47x (31 Dec 2022: 1.65x)
Operating Highlights
-- H1 revenues comprised growth from both the VLG Brands and
Customer Brands with revenue growth in customer brands being
particularly strong. On a proforma(2) basis revenue was 10.4% ahead
of the previous year
-- Continued strong performance of Balance Activ and Lift
Brands, achieving revenue growth of 24% and 16% respectively
-- 17 new listings secured with major retailers for Balance
Activ, Lift and Earol, plus progress on digital transformation;
online sales were 69% ahead of the previous year at GBP1.6m (H1 22:
GBP0.9m)
Jerry Randall, CEO of Venture Life Group plc commented: "I am
delighted with performance of the business over this first half,
with strong growth contributions, in particular from our Customer
Brands, as well as from Balance Activ and Lift, in the VLG Brands
portfolio. The acquisitions we made in 2021 and 2022 are now fully
integrated and delivering good organic growth, and as expected, we
will be launching newly developed products in the second half of
the year and increasing our distribution points in the UK, which
will both contribute to the expected stronger revenues in H2. We
have delivered good cash conversion and seen a meaningful reduction
in our debt position, having now paid the full contingent
consideration for the acquisition of HLH in the first half. We
expect strong cash generation to continue through the second half
and will maintain our focus on cost savings to further reduce our
net leverage(1) . I send out a big thanks again to all our hard
working, dedicated and innovative team across the Group for
continuing to grow our business in challenging times."
* The performance of the Group is assessed using Alternative
Performance Measures ("APMs"), which are measures that are not
defined under IFRS but are used by management to monitor ongoing
business performance against both shorter term budgets and
forecasts and against the Group's longer term strategic plans. APMs
are defined in note 16.
(1) Group net leverage calculated as net debt (excl. finance
leases) and using proforma (1) Adjusted EBITDA(3) on a trailing
12-month basis.
(2) Proforma basis i.e. if the acquisition had been in place for
the whole of the prior period.
(3) Adjusted EBITDA for Group net leverage is EBITDA after
deduction of finance lease costs and before deduction of
exceptional items (see note 6) and share based payments (see note
16 for reconciliation)
Investor Meets Presentation
A live presentation relating to the 2023 Interim Results via
Investor Meet Company will be provided on 27 September 2023 at
11:00am BST. The presentation is open to all existing and potential
shareholders. Investors can sign up to Investor Meet Company for
free and add to meet Venture Life Group plc via:
https://www.investormeetcompany.com/venture-life-group-plc/register-investor
Investors who already follow Venture Life Group plc on the Investor
Meet Company platform will automatically be invited.
Change of Name of Nominated Adviser and Broker and Appointment
as Sole Broker
The Company also announces that its Nominated Adviser and Broker
has changed its name to Cavendish Securities plc ("Cavendish")
following completion of its own merger.
The Company also announces that Cavendish will act as Nominated
Adviser and sole corporate broker with immediate effect.
For further information, please contact:
Venture Life Group PLC +44 (0) 1344 578004
Jerry Randall, Chief Executive Officer
Daniel Wells, Chief Financial Officer
+44 (0) 20 7397
Cavendish Securities plc (Nomad and Broker) 8900
Michael Johnson (Sales)
Stephen Keys / Camilla Hume (Corporate Finance)
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 Activ range in the area of women's intimate
healthcare, the Lift and Glucogel product ranges for hypoglycaemia,
Gelclair and Pomi-T for oncology support, Earol for ear wax
removal, 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.
Trading Performance
Overview
Group revenues for the period grew by 24.4% to GBP23.5m and on a
proforma(1) basis revenue was 10.4% ahead of H1 2022, comprising
growth from both the VLG brands and Customer brands. Excluding the
newly acquired HLH, revenue performance elsewhere in the Group was
11.4% ahead of the same period last year. Traditionally the VLG
Brand revenues are weighted more towards the second half (2022: H1
44%, H2 56%), and we expect this to be the case in the second half
of 2023 which is also expected to benefit from the impact of new
distribution gains and the launch of several newly developed
products.
Revenue GBP'm 30-Jun-23 Actual 30-Jun-22 Actual 30-Jun-22 Proforma Growth Vs 2022 Growth Vs Proforma
Unaudited six months
ended
Balance Activ 2.9 2.3 2.3 24% 24%
Lift 2.3 2.0 2.0 16% 16%
Earol 2.3 - 2.2 100% 6%
Ultradex 1.1 0.9 0.9 16% 16%
Gelclair 1.0 0.3 0.3 201% 201%
Glucogel 1.0 1.1 1.1 (9%) (9%)
Dentyl 0.9 1.2 1.2 (29%) (29%)
Footcare 0.8 0.9 0.9 (9%) (9%)
Pomi-T 0.1 0.4 0.4 (77%) (77%)
Other 0.5 0.8 1.0 (32%) (45%)
Sub-Total VLG Brands 12.9 10.1 12.5 27% 3%
Customer Brands 10.6 8.8 8.8 20% 20%
Total 23.5 18.9 18.9 25% 10%
Venture Life Brands
VLG Brands delivered revenues of GBP12.9m (H1 22: GBP10.1m), a
growth of 27% over the previous period and accounted for 55% of
first half revenues (H1 22: 53%). VLG Brands include the
acquisition of HLH on 30 November 2022 which delivered revenues of
GBP2.4m during the period (H1 22: GBP2.4m). HLH's main product is
Earol which contributes c.95% of the sales and achieved revenues of
GBP2.3m in the period (H1 22: GBP2.2m), a growth of 6.1% over the
previous period on a proforma(2) basis.
On a proforma(1) basis, revenue from VLG Brands was 3.5% ahead
of the same period the previous year; within this portfolio the
Balance Activ and Lift brands have continued to perform strongly,
achieving revenue growth of 24% and 16% respectively during the
period. Revenues for the VLG Brands are expected to show stronger
growth in the second half consistent with previous years.
The Group's focus for 2023 is driving organic growth through the
dual approach of distribution gains and new product development.
The Group's extensive research and development capability, coupled
with significant capacity in its manufacturing operations, means it
is well positioned to rapidly innovative and develop efficacious
new products for its VLG Brand portfolio. The second half of 2023
will see the market entry for some of these new products and the
Group has a program to continue this innovation program over the
coming years.
VLG Brands Revenue 30-Jun-23 30-Jun-22 30-Jun-22 Growth Growth
GBP'm Actual Actual Proforma Vs Reported Vs Proforma
Unaudited six months % %
ended
Energy Management 3.3 3.2 3.2 4% 4%
Women's Health 2.9 2.3 2.3 24% 24%
Ear, Nose & Throat 2.4 - 2.4 100% 0%
Oral Care 2.0 2.4 2.4 (16%) (16%)
Oncology Support 1.2 0.9 0.9 42% 42%
Footcare 0.8 0.9 0.9 (9%) (9%)
Other 0.2 0.4 0.4 (44%) (44%)
Total 12.9 10.1 12.5 27% 3%
Energy Management
Energy management (LIFT & Glucogel) grew by 4% to GBP3.3m
(H1 22: GBP3.2m). These products are predominantly sold in the UK
& Eire and the main component of this first half growth has
been the impact of the increased listing of Lift in Eire through
our distributor there. As with most of our VLG Brands, we are
increasing our online revenues through Amazon at this time, and
although small, we saw growth in the Lift online revenues in both
the UK and USA driven by advertising investment and listing
optimisation.
Lift revenues for the first half were GBP2.3m (H1 22: GBP2.0m)
and Glucogel revenues GBP1.0m (H1 22: GBP1.0m). The second half of
the year is expected to deliver more growth for Lift as several
newly developed products will be launching in both the off-line and
on-line settings. Extension of the Lift brand with these new
products will allow us to broaden the offering and bring new users
into the brand, as well as extend our points of distribution.
Women's Health
Revenues for the Balance Activ brand grew 24% to GBP2.9m (H1 22:
GBP2.3m). Revenues from this brand were split GBP1.2m (H1 22:
GBP1.1m) in UK & EU direct to retail and online, and GBP1.7m
(H1 22: GBP1.2m) internationally with our distribution
partners.
Growth in the UK & EU retail and online has been driven by
several initiatives. The launch of a 14 tube multipack (compared to
the usual 7 tube pack) of the Balance Activ gel has allowed us to
attract value shoppers at a time when cost of living pressures have
been increasing. Performance in the grocery channel has also been
good, with both the BV gel and pessary in growth, and the launch of
our newly developed Thrush cream in the first outlets.
Internationally our partners have performed well, with increased
geographic distribution contributing to growth. Revenues with
partners rose 33% to GBP1.7m (H1 22: GBP1.2m). The launch of the
Balance Activ gel in Brazil with our partner contributed to revenue
growth in the first half.
Ear, Nose & Throat
Revenues for the brands in this area were GBP2.4m (H1 22:
GBPnil) and arose from the HL Healthcare Limited business, acquired
on 30 November 2022. Products in this portfolio are Earol, Earol
Swim and Sterinase.
Earol accounts for the vast majority of revenues (and includes
sales under the brand name Vaxol in certain European territories)
and was GBP2.2m in the first half of 2023. On a like for like basis
in 2022, revenues were GBP2.1m, so H1 2023 was 6% ahead of the H1
2022 revenues. This growth has been driven more on the
international side than in the UK. New points of distribution and
the launch of the product on Amazon is expected to contribute to
growth in the UK in H2, with new product development also being
launched in H2 2023.
Earol Swim revenues were GBP0.2m vs GBP0.2m on a like for like
basis in H1 2022.
Oncology Support
Revenues for the brands in this area were up 42% to GBP1.2m (H1
22: GBP0.9m), driven by growth of Gelclair, with revenues three
times higher than for the same period in 2022 at GBP1.0m (H1 22:
GBP0.3m). This brand is sold entirely through partners, and as
indicated when we acquired this brand, timing of revenues can be
variable and growth is dependent, to a large extent, on geographic
expansion. Integration into the Group from the previous owner,
coupled with the MDR process meant revenues in H1 2022 were lower
than historically seen for the products, and revenues in H1 2023
are more reflective of the normal level of business. New agreements
signed in 2022 are expected to continue to contribute to growth in
the second half.
Pomi T revenues were lower in the first half of 2023 at GBP0.1m
(H1 22: GBP0.5m) due to the timing of delivery of orders. H2
revenues are expected to be significantly higher based on the order
book in hand for this product. With only a small number of current
partners, activity is ongoing to increase the geographic
penetration of this brand, as well as areas of new product
development.
Oral care
Revenues for the oral care brands were down 16% at GBP2.0m
compared to the same period last year (H1 22: GBP2.4 m). Whilst
Ultradex revenues grew in the period there was an overall revenue
reduction in this sector driven by lower Dentyl revenues, emanating
from the combination of poor performance by our Chinese partner and
aggressive promotion of competitor brands during the Period.
Revenues for UltraDEX were 16% higher at GBP1.1m (H1 22:
GBP0.9m), as we see a continued return to usage of the product post
lockdowns with the growth being driven primarily by our online
sales through Amazon.
Dentyl revenue, by comparison, was down 9% in the UK, to GBP0.9m
(H1 22: GBP1.0m) as a result of aggressive promotion from the big
competitors, such as Listerine. Internationally we currently only
have one partner for Dentyl, Samarkand in China, and we have
recorded no sales to them in the first half of 2023 (H1 22:
GBP0.3m), as they have performed poorly with the product, and this
is under review. Elsewhere within the International business, other
oral care revenues from non-core products were GBP0.1m (H1 22:
GBP0.2m).
Digital
Direct online sales (through Amazon) increased 69% to GBP1.6m
(H1 22: GBP0.9m), as a result of strong growth by a number of our
brands, including Balance Activ and Lift, and included the launch
of Balance Activ through Amazon Germany, the largest Amazon market
in the EU. As a result of this growth, online sales represented
12.3% of the Venture Life Brands revenues in H1 2023, compared to
9.7% in H1 2022.
We expect to see further progress in online revenues in the
second half, as we extend our online presence, including the launch
of Earol on Amazon and further European roll out of Balance Activ
across the Amazon platform.
Customer Brands
The Customer Brands business had a strong first half with
revenue increasing 20% to GBP10.6m (H1 22: GBP8.8m). This growth
was delivered mainly from existing customers and included GBP1.2m
of revenues from newly developed products that completed
development in 2022. This shows the strength of the in-house
development expertise we have within our Italian facility, which
has also developed a number of new products for the Venture Life
Brands which will be launching in H2 2023 and beyond. The balance
of growth came from the existing customers growing their own sales
and showing that demand remains strong in the consumer health
space.
Operational developments
Operationally we have worked in the first half to bolster the
team to manage the growing business. This included the appointment
of Fabio Perego as Group Operations Director, and General Manager
of both the Biokosmes manufacturing facility in Italy and the Rolf
Kullgren manufacturing facility in Sweden. Fabio has extensive
experience in the Contract Development and Manufacturing
Organisation space, and in particular, in medical devices, and will
be responsible for the harmonisation of the two facilities and the
maximisation of efficiencies in production at the two sites.
Innovation and the Medical device Directive
At our Biokosmes development facility we have a deep technical
department covering research, innovation, development, regulatory
and quality assurance. With our own quality management systems in
place across the business (in Italy, Sweden, The Netherlands and
the UK) we are strongly positioned to develop and manufacture new
products for both the Venture Life and Customer Brands business
units. We have seen this already in the Customer Brands business in
the first half, and will see this impact also in the Venture Life
Brands in the second half, with the launch of a number of new
products in UK retailers including:
-- Baby Earol
-- Lift Energy Boost Range
-- Balance Activ cleansing range
-- Balance Activ Thrush cream
-- Women's Intimate Health probiotic range
During 2023 and into 2024 it is our intention to focus resource
on the expansion of our revenues through new product development
and organic growth, and further capitalising on the brands and
products we have acquired over recent years.
The transition from the Medical Device Directive (MDD) to the
Medical Device Regulations (MDR) continues. However, an extension
to the deadline to transfer products has been recently announced,
and now products can continue to be sold under their MDD
certificates until May 2028 (previously May 2024), which means that
the timing to complete new MDR registrations has become more
relaxed with 4 additional years to achieve this. As a result, we
have slowed down the registration process for the remaining
technical files that we have not yet registered under MDR, to
alleviate pressure in the approval system. This will also have an
added benefit that the costs to undertake these new registrations
(in excess of EUR1 million across all our files) can be spread over
the next 4 and a half years rather than the next 12 months. This
will free up more cash flow to further reduce our net leverage(1)
.
Sustainable Life
Our progress in the pursuit of our sustainability goals
continued to be strong in the first half. We were delighted to
bolster the ESG team in February 2023, with the appointment of Emma
Caprini, a dedicated executive in the ESG team in Italy. Objectives
for ESG in 2023 are:
-- Obtaining BCorp status for our Biokosmes manufacturing
facility - this will also be a test run of the process for
obtaining BCorp for the whole Group in 2024.
-- Assessing the carbon footprint of our Biokosmes manufacturing
facility and designing the net zero 2050 plan for the facility -
this will also be a test run of the process for obtaining carbon
footprint and net zero plan for the whole Group in 2024.
-- Undertaking the life cycle analysis for three of Venture Life
Brands - Dentyl, UltraDEX and Balance Activ.
We are on target to complete these objectives by the end of
2023.
Post period end, we have been awarded the Ecovadis Silver
Sustainability Rating at our Biokosmes facility. Ecovadis is
world's largest and most reliable provider of corporate
sustainability assessments and has more than 90,000 companies
assessed in 175 countries in over 200 industries. Many of our
customers look to this assessment to understand our commitment to
sustainability. This Silver Sustainability Rating places us in the
top 25% of companies assessed. Last year we were awarded the Bronze
Award and it is as a result of numerous improvements around the
facility and hard work by the whole team that we achieved this
improved rating.
Profit and loss account
The Group delivered Adjusted EBITDA(1) of GBP4.4m for the
six-month period, an increase of 33% over the GBP3.3m reported in
the previous year and at an improved margin of 18.9% (H1 22:
17.6%).
The inflationary environment has been challenging over the last
three years but we have continued to see this plateau gradually
over the course of 2023. Raw materials and packaging, which had
been procured at inflated prices during the height of the supply
chain issues in the prior year, have now unwound through cost of
goods sold.
Our teams have worked hard to mitigate the financial impact,
delivering production efficiencies and extending our supplier
network to increase the number of alternative supply options
available. Costs have been passed onto customers only where it has
been possible to do so. As there is a lag effect between these
costs being incurred and being passed onto customers, we expect to
see a positive impact on margins in the second half of 2023.
In addition, the first half of 2023 has absorbed the impact of
fair value adjustments on inventory acquired as part of the HLH
acquisition which inflated the cost of goods sold and this
inventory has been sold in full during the period.
The net impact of these factors resulted in an overall decline
in gross margin by 350 basis points (bp) to 37.1% (H1 22: 40.6%)
and a 14% increase in gross profit to GBP8.7m (H1 22: GBP7.7m),in
line management's expectations and is expected to improve in the
second half of the year.
Our vertically integrated business model enables newly acquired
brands to be integrated profitably within the existing
infrastructure. Operating costs (defined as operating expenses less
depreciation) were in line with the previous year at GBP4.5m (H1
22: GBP4.5m) and as a % of revenue reduced by 450bp to 19.1% (H1
22: 23.6%) which highlights the Group's ability to deliver
significant operational gearing benefit.
Operating profit before amortisation and exceptional items
increased by 40.9% to GBP3.3m (H1 22: GBP2.4m) reflecting the pull
through effect of the EBITDA improvement which was offset partially
by an GBP0.2m increase in depreciation charges to GBP1.0m (H1 22:
GBP0.9m).
As disclosed in the 2022 full year results, there was a material
uncertainty around the impairment assessment of Dentyl due to an
unknown speed of recovery from our partner in China. This position
has not changed since last year and coupled with a decline in the
UK performance, has resulted in an impairment of GBP0.4m being
recognised against the Dentyl brand during the period. The carrying
value of the attributable intangible assets is now GBP3.8m at 30
June 2023 (30-Jun-22: GBP4.3m). The Group is actively seeking new
opportunities for the brand internationally, however as a prudent
measure we have reduced the useful economic life (UEL) applied to
Dentyl for amortisation purposes to mitigate the risk of further
impairment.
Amortisation of GBP2.3m (H1 22: GBP1.6m) increased significantly
due to the acquisition of HLH as well as a reduction in the UEL of
the acquired brand pertaining to Dentyl. Exceptional costs incurred
to complete integration of previous acquisitions have reduced to
GBP0.2m (H1 22: GBP0.3m) and were significantly lower than the full
year prior year.
Net finance costs of GBP1.7m were significantly higher than the
prior period (H1 22: GBP0.7m) due to a significant increase in
interest payable on the Group's revolving credit facility by
GBP0.6m to GBP0.8m (H1 22: GBP0.2m) reflecting the additional debt
drawn to fund the acquisition of HLH which has been compounded by
the increase in the Bank of England base rate. The balance of the
overall increase comprised non-cash factors, including a GBP0.2m
increase in amortisation of the up-front fees of this facility
which are already paid for, the profile of amortisation is aligned
to the anticipated usage of the facility over the term, as such the
full year finance charge in the P&L is expected to increase.
Net exchange losses of GBP0.7m (H1 22: GBP0.4m) accounted for the
remainder of the increase.
Net of the increase in amortisation, impairment and finance
costs and reduction in exceptional costs, the loss before tax for
the period increased to GBP1.3m (H1 22: GBP0.2m).
Cash generation
Free cash flow in the period was GBP2.6m (H1 22: GBP0.5m). Net
debt reduced to GBP15.3m as at 30 June 2023 (31-Dec-22: GBP16.6m)
and Group net leverage(1) reduced to 1.47x at the period end
(31-Dec-22: 1.65x). Cash generated from operations increased to
GBP4.1m (H1 22: GBP1.8m) and underlying cash from operations
increased to GBP4.8m (H1 22: GBP1.8m) aided by improved cashflow
conversion of 108% versus the 56% in the comparative period.
This cash generation has been used to reduce interest bearing
borrowings by GBP3.3m to GBP19.0m at 30 June 2023 (31-Dec-22:
GBP22.3m) including full payment of the contingent consideration of
GBP3.0m on the acquisition of HLH.
We expect cash generation to increase further in H2, reflecting
the growth in revenues and collection of cash from customer billing
following strong revenues at the end of H1, and for Group net
leverage(1) to reduce to approximately 1.0-1.1x by the end of the
year.
Current trading and outlook
Post period trading continues to perform well. We anticipate
strong sales growth in H2 across our VLG Brands, including the
impact of new distribution in the UK which is bolstered by new
product launches and the continued strong sales growth from our
Customer Brands. The order book remains strong and is c.35% up
since the end of the previous year.
The order book growth is driven by our higher margin VLG Brands
and, on a standalone basis, revenue visibility for this part of the
business has increased 2.5x compared to the same time last year
giving us confidence in the Group's ability to deliver an improved
gross margin in the second half. This together with a tight control
on operating costs underpins the Board's confidence in meeting
management's expectations for the full year notwithstanding the
continued strong performance of the lower margin customer brands
business.
Jerry Randall Daniel Wells
Chief Executive Officer Chief Financial Officer
25 September 2023 25 September 2023
(1) Group net leverage calculated as net debt (excl. finance
leases) and using proforma (2) Adjusted EBITDA(3) on a trailing
12-month basis.
(2) Proforma basis i.e. if the acquisition had been in place for
the whole of the prior period.
(3) Adjusted EBITDA for Group net leverage is EBITDA after
deduction of finance lease costs and before deduction of
exceptional items (see note 6) and share based payments (see note
16 for reconciliation)
Unaudited Interim Condensed Consolidated Statement of
Comprehensive Income
For the six months ended 30 June 2023
Note Six months Six months Year
ended ended ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Revenue 4.1 23,454 18,860 43,980
Cost of sales (14,733) (11,203) (26,315)
--------------------- --------------------- ----------
Gross profit 8,721 7,657 17,665
Operating expenses (5,496) (5,309) (10,927)
Impairment gain / (losses) of
financial assets 1 (75) 180
Amortisation of intangible assets 5 (2,321) (1,612) (3,564)
Impairment of intangible assets (389) - -
--------------------- --------------------- ----------
Total administrative expenses (8,205) (6,996) (14,311)
Other income 84 77 151
Operating profit before exceptional
items 600 738 3,505
--------------------- --------------------- ----------
Exceptional items 6 (217) (300) (1,278)
Operating profit 383 438 2,227
--------------------- --------------------- ----------
Finance income - - 1
Finance costs 7 (1,716) (679) (1,522)
(Loss)/Profit before tax (1,333) (241) 706
--------------------- --------------------- ----------
Tax 8 (175) 9 (186)
(Loss)/Profit for the period
attributable to the equity shareholders
of the parent (1,508) (232) 520
--------------------- --------------------- ----------
Other comprehensive (loss)/income
which may be subsequently reclassified
to the income statement 9 (345) 763 1,679
Total comprehensive (loss)/profit
for the period attributable to
equity shareholders of the parent (1,853) 531 2,199
--------------------- --------------------- ----------
Basic (loss)/profit per share
(pence) attributable to equity
shareholders of the parent 10 (1.19) (0.18) 0.41
Diluted basic (loss)/profit per
share (pence) attributable to
equity shareholders of the parent 10 (1.19) (0.18) 0.39
Unaudited Interim Condensed Consolidated Statement of Financial
Position
As at 30 June 2023
Note 30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
ASSETS GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 12A 75,846 64,271 78,694
Property, plant and equipment 12B 9,006 9,715 10,090
Deferred tax 8 2,457 2,502 2,443
87,309 76,488 91,227
--------------------- --------------------- ------------------
Current assets
Inventories 12,666 11,491 11,998
Trade and other receivables 13,034 12,637 16,433
Cash and cash equivalents 3,658 5,393 5,631
--------------------- --------------------- ------------------
29,358 29,521 34,062
--------------------- --------------------- ------------------
TOTAL ASSETS 116,667 106,009 125,289
--------------------- --------------------- ------------------
EQUITY & LIABILITIES
Capital and reserves
Share capital 13 379 379 379
Share premium account 13 65,960 65,960 65,960
Merger reserve 13 7,656 7,656 7,656
Foreign currency translation reserve 1,220 649 1,565
Share-based payment reserve 932 976 812
Retained earnings (2,221) (1,581) (713)
--------------------- ---------------------
Total equity attributable to equity
holders of the parent 73,926 74,039 75,659
--------------------- --------------------- ------------------
LIABILITIES
Current liabilities
Trade and other payables 8,973 11,063 11,725
Taxation 1,055 349 891
Interest bearing borrowings - Deferred
contingent consideration - - 2,947
Interest bearing borrowings - Leasing
obligations 761 786 920
--------------------- --------------------- ------------------
10,789 12,198 16,483
--------------------- --------------------- ------------------
Non-current liabilities
Interest bearing borrowings - Bank
loans 16,898 8,528 17,314
Interest bearing borrowings - Leasing
obligations 3,257 3,684 3,651
Interest bearing borrowings -
Subordinated
loan (deferred consideration) 2,106 - 2,014
Statutory employment provision 1,413 1,240 1,461
Deferred tax liability 8 8,278 6,320 8,707
--------------------- --------------------- ------------------
31,952 19,772 33,147
--------------------- --------------------- ------------------
TOTAL LIABILITIES 42,741 31,970 49,630
--------------------- --------------------- ------------------
TOTAL EQUITY & LIABILITIES 116,667 106,009 125,289
--------------------- --------------------- ------------------
Unaudited Interim Condensed Consolidated Statement of Changes in
Equity
For the six months ended 30 June 2023
Share Share Merger Foreign Share-based Retained Total
capital premium reserve currency payment earnings equity
account translation reserve
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- ------------- ------------ ---------- --------
Balance at
1 January 2022
(Audited) 377 65,738 7,656 (114) 856 (1,349) 73,164
--------- --------- --------- ------------- ------------ ---------- --------
Loss for the
period - - - - - (232) (232)
Foreign exchange
for period - - - 763 - - 763
--------- --------- --------- ------------- ------------ ---------- --------
Total comprehensive
income - - - 763 - (232) 531
--------- --------- --------- ------------- ------------ ---------- --------
Share options
charge - - - - 120 - 120
Shares issued 2 222 - - - - 224
--------- --------- --------- ------------- ------------ ---------- --------
Transactions
with Shareholders 2 222 - - 120 - 344
Balance at
30 June 2022
(Unaudited) 379 65,960 7,656 649 976 (1,581) 74,039
--------- --------- --------- ------------- ------------ ---------- --------
Profit for the
period - - - - - 752 752
Foreign exchange
for period - - - 916 - - 916
--------- --------- --------- ------------- ------------ ---------- --------
Total comprehensive
income - - - 916 - 752 1,668
--------- --------- --------- ------------- ------------ ---------- --------
Share options
charge - - - - (48) - (48)
Share options
charge recycling - - - - (116) 116 -
--------- --------- --------- ------------- --------
Transactions
with Shareholders - - - - (164) 116 (48)
Balance at
31 December
2022 (Audited) 379 65,960 7,656 1,565 812 (713) 75,659
--------- --------- --------- ------------- ------------ ---------- --------
Profit for the
period - - - - - (1,508) (1,508)
Foreign exchange
for period - - - (345) - - (345)
--------- --------- --------- ------------- ------------ ---------- --------
Total comprehensive
income - - - (345) - (1,508) (1,853)
--------- --------- --------- ------------- ------------ ---------- --------
Share options
charge - - - - 120 - 120
Transactions
with Shareholders - - - - 120 - 120
Balance at
30 June 2023
(Unaudited) 379 65,960 7,656 1,220 932 (2,221) 73,926
--------- --------- --------- ------------- ------------ ---------- --------
Unaudited Interim Condensed Consolidated Statement of Cash
Flows
For the six months ended 30 June 2023
Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Cash flow from operating activities:
(Loss)/profit before tax (1,333) (241) 706
Finance cost 1,716 679 1,521
--------------------- --------------------- -----------
Operating profit 383 438 2,227
Adjustments for:
- Depreciation of property, plant
and equipment 1,006 855 1,821
- Impairment losses of financial
assets (1) 75 (180)
- Amortisation of intangible assets 2,321 1,612 3,564
- Impairment of intangible assets 389 - -
- Loss on disposal of non-current
assets - - 40
- Share-based payment expense 120 120 72
--------------------- --------------------- -----------
Operating cash flow before movements
in working capital 4,218 3,100 7,544
Increase in inventories (952) (2,282) (2,329)
Decrease/(increase) in trade and
other receivables 3,096 (288) (2,517)
(Decrease)/increase in trade and
other payables (2,296) 1,232 3,489
--------------------- --------------------- -----------
Cash generated by operating activities 4,066 1,762 6,187
Tax paid (370) (319) (674)
Tax receipt - - 53
--------------------- --------------------- -----------
Net cash from operating activities 3,696 1,443 5,566
Cash flow from investing activities:
Acquisition of subsidiaries, net
of cash acquired (2,933) - (7,482)
Purchases of property, plant and
equipment (242) (169) (860)
Expenditure in respect of intangible
assets (414) (377) (3,346)
--------------------- --------------------- -----------
Net cash used by investing activities (3,589) (546) (11,688)
--------------------- --------------------- -----------
Cash flow from financing activities:
Net proceeds from issuance of ordinary
shares - 224 224
Drawdown in interest-bearing borrowings 1,838 417 14,985
Repayment of interest-bearing borrowings (2,276) (500) (6,728)
Leasing obligation repayments (479) (433) (922)
Interest paid (755) (272) (637)
---------------------
Net cash from financing activities (1,672) (564) 6,922
--------------------- --------------------- -----------
Net (decrease)/increase in cash
and cash equivalents (1,565) 333 800
Net foreign exchange difference (408) (175) (404)
Cash and cash equivalents at beginning
of period 5,631 5,235 5,235
--------------------- --------------------- -----------
Cash and cash equivalents at end
of period 3,658 5,393 5,631
--------------------- --------------------- -----------
Notes to the Unaudited Interim Condensed Consolidated Financial
Statements for the six months ended 30 June 2023
1. Corporate information
The Interim Condensed Consolidated Financial Statements of
Venture Life Group plc and its subsidiaries (collectively, the
Group) for the six months ended 30 June 2023 ("the Interim
Financial Statements") were approved and authorised for issue in
accordance with a resolution of the directors on 25 September
2023.
Venture Life Group plc ("the Company") is domiciled and
incorporated in the United Kingdom, and is a public company whose
shares are publicly traded on AIM. The Group's principal activities
are the development, manufacture and distribution of healthcare and
dermatology products.
2. Basis of preparation
The Group Financial Statements are prepared in accordance with
the recognition and measurement principles of the United Kingdom
adopted International Financial Reporting Standards and does not
constitute statutory accounts within the meaning of section 343 of
the Companies Act 2006.
The interim financial information in this report has been
prepared using accounting policies consistent with International
Financial Reporting Standards ("IFRS") as adopted by the UK. IFRS
is subject to amendment and interpretation by the International
Accounting Standards Board (IASB) and the IFRS Interpretations
Committee (IFRIC) and there is an ongoing process of review and
endorsement by the UK Endorsement Board. The financial information
has been prepared based on IFRS that the Directors expect to be
adopted by the UK and applicable as at 31 December 2023. The Group
has chosen not to adopt IAS 34 "Interim Financial Statements" in
preparing the interim financial information.
The financial information contained in the Interim Financial
Statements, which are unaudited, does not constitute statutory
accounts in accordance with the Companies Act 2006. The financial
information for the year ended 31 December 2022 is extracted from
the statutory accounts for that year which have been delivered to
the Registrar of Companies and on which the auditor issued an
unqualified opinion that included an emphasis of matter reference
or statement made under section 498(2) or (3) of the Companies Act
2006.
3. Accounting policies
The accounting policies adopted in the preparation of the
Interim Financial Statements are consistent with those followed in
the preparation of the Consolidated Financial Statements for the
year ended 31 December 2022.
Foreign currencies
The assets and liabilities of foreign operations are translated
into sterling at exchange rates ruling at the balance sheet date.
Revenues generated and expenses incurred in currencies other than
sterling are translated into sterling at rates approximating to the
exchange rates ruling at the dates of the transactions. Foreign
exchange differences arising on retranslation of assets and
liabilities of foreign operations are recognised directly in the
foreign currency translation reserve.
The sterling/euro exchange and sterling/SEK rates used in the
Interim Financial Statements and prior reporting periods are as
follows:
Sterling/euro exchange rates Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
Average exchange rate for period 1.141 1.188 1.173
Exchange rate at the period end 1.163 1.162 1.129
Sterling/SEK exchange rates Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
Average exchange rate for period 12.926 12.439 12.461
Exchange rate at the period end 13.710 12.441 12.583
4. Segmental information
Management has determined the operating segments based on the
reports reviewed by the Group Board of Directors (Chief Operating
Decision Maker) that are used to make strategic decisions. The
Board considers the business from a line-of-service perspective and
uses operating profit/(loss) as its profit measure. The operating
profit/(loss) of operating segments is prepared on the same basis
as the Group's accounting operating profit/(loss) before
exceptional items (see note 6)
In line with the 2022 Consolidated Financial Statements, the
operations of the Group are segmented as VLG Brands, which includes
sales of healthcare and skin care products under distribution
agreements and direct to UK retailers, and Customer Brands, which
includes development and manufacturing.
The following is an analysis of the Group's revenue and results
by reportable segment.
VLG Customer Eliminations Consolidated
Brands Brands Group
GBP'000 GBP'000 GBP'000 GBP'000
Six months to 30 June 2023
Revenue
External Sales 12,875 10,579 - 23,454
Inter-segment sales 683 3,637 (4,320) -
Total revenue 13,558 14,216 (4,320) 23,454
-------- --------- --------------------- -----------------------
Results
Operating (loss)/profit before
exceptional items and excluding
central administrative costs (1,466) 4,315 - 2,849
-------- --------- --------------------- -----------------------
VLG Brands Customer Eliminations Consolidated
Brands Group
GBP'000 GBP'000 GBP'000 GBP'000
Six months to 30 June
2022
Revenue
External sales 10,077 8,783 - 18,860
Inter-segment sales 633 2,172 (2,805) -
Total revenue 10,710 10,955 (2,805) 18,860
----------- --------- ------------- -------------
Results
Operating profit before
exceptional items and excluding
central administrative
costs 1,270 1,163 - 2,433
----------- --------- ------------- -------------
VLG Brands Customer Eliminations Consolidated
Brands Group
GBP'000 GBP'000 GBP'000 GBP'000
Twelve months to 31 December
2022
Revenue
External sales 23,135 20,845 - 43,980
Inter-segment sales 1,444 4,776 (6,220) -
Total revenue 24,579 25,621 (6,220) 43,980
----------- --------- ---------------------- ----------------------
Results
Operating profit before
exceptional items and
excluding central administrative
costs 3,799 3,674 - 7,473
----------- --------- ---------------------- ----------------------
Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Operating profit before exceptional
items and excluding central administrative
costs 2,849 2,433 7,473
Central administrative costs (2,249) (1,695) (3,968)
Exceptional expenses (217) (300) (1,278)
Operating profit 383 438 2,227
Net finance cost (1,716) (679) (1,521)
(Loss)/profit before tax (1,333) (241) 706
------------ ------------ -----------
,
5. Amortisation of intangible assets
Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
Amortisation of: GBP'000 GBP'000 GBP'000
Acquired intangible assets (794) (611) (1,293)
Patents, trademarks and other intangible
assets (1,189) (786) (1,686)
Capitalised development costs (338) (215) (585)
(2,321) (1,612) (3,564)
------------ ------------ -----------
6. Exceptional items
Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Costs incurred in acquisitions - (75) (860)
Integration of acquisitions (160) (89) (202)
Restructuring costs (57) (136) (216)
(217) (300) (1,278)
------------ ------------ -----------
The Group treats costs as exceptional items where their
frequency and nature warrant being separately classified. In the
six month period to 30 June 2023, the Group incurred integration
costs of acquisitions of GBP160,000 which included the final unwind
of prepaid warranty insurance on the acquisition of BBIH and costs
incurred in completing the integration of HL Healthcare.
Restructuring costs of GBP57,000 were incurred in the period and
have been classified as an exceptional item in consistence with
prior periods.
7. Finance costs
Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
On loans and overdrafts 802 241 594
Amortised finance issue costs 183 (13) 212
Interest on lease liabilities 34 31 71
Net exchange difference 697 420 645
1,716 679 1,522
------------ ------------ -----------
8. Taxation
The Group calculates the income tax expense for the period using
the tax rate that would be applicable to the earnings in the six
months to 30 June 2023. The major components of income tax expense
in the Interim Condensed Statement of Comprehensive Income are as
follows:
Six months Six months Year
ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Current income tax (599) (438) (1,206)
Deferred income tax expense related
to origination and reversal of timing
differences 424 447 1,020
Income tax (expense)/credit recognised
in statement of comprehensive income (175) 9 (186)
------------ ------------ ----------
The current income tax expense is based on the profits of the
businesses based in Italy and Netherlands. The UK based businesses
have utilised tax losses and thus have no current income tax
expense.
At the period end, the estimated tax losses amounted to
GBP9,867,000 (30 June 2022: GBP10,163,000; 31 December 2022:
GBP9,867,000).
9. Other comprehensive income/(expense)
Other comprehensive income/(expense) represents the foreign
exchange difference on the translation of the assets, liabilities
and reserves of Biokosmes and PharmaSource which have functional
currencies of Euros and the Swedish entities which have functional
currencies in Swedish Krona (SEK). The movement is shown in the
foreign currency translation reserve between the date of
acquisition of Biokosmes, when the GBP/EUR rate was 1.193 and the
balance sheet date rate at 30 June 2023 of 1.163 (at 31 December
2022 of 1.129 and at 30 June 2022 of 1.162) together with the same
computation for PharmaSource BV between the date of acquisition
when the GBP/EUR rate was 1.185 and the balance sheet date rate at
30 June 2023 of 1.163. The movement for Sweden is shown in the
foreign currency translation reserve between the date of
acquisition of BBI Healthcare, when the GBP/SEK rate was 11.742 and
the balance sheet date rate at 30 June 2023 of 13.710 (at 31
December 2022 of 12.583 and at 30 June 2022 of 12.441). The result
is an amount that may subsequently be reclassified to profit and
loss.
10. Earnings per share
Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
Weighted average number of ordinary
shares in issue 126,498,197 126,012,009 126,257,101
(Loss)/profit attributable to equity
holders of
the Company (GBP'000) (1,508) (232) 520
Basic (loss)/profit per share (pence) (1.19) (0.18) 0.41
Diluted (loss)/profit per share
(pence) (1.19) (0.18) 0.39
Adjusted profit per share (pence)(4) 0.91 1.43 4.30
Diluted adjusted profit per share
(pence)(5) 0.86 1.37 4.07
(4) Adjusted earnings per share is profit after tax excluding
amortisation, exceptional items and share based payments.
(5) Diluted adjusted earnings per share is profit after tax
excluding amortisation, exceptional items and share based payments,
diluted by the inclusion of 6,454,515 stock options and 554,115
long-term incentive plan awards ("LTIP's"). Including this
dilution, the weighted average number of ordinary shares for the
diluted EPS calculation is 133,506,827 (30 June 2022: 131,622,290;
31 December 2022: 133,393,929) shares.
In circumstances where the Basic and Adjusted results per share
attributable to ordinary shareholders are a loss then the
respective diluted figures are identical to the undiluted figures.
This is because the exercise of share options would have the effect
of reducing the loss per ordinary share and is therefore not
dilutive under the terms of IAS 33.
11. Intangible assets
At the reporting date the Goodwill generated from the
acquisitions of Biokosmes Srl in March 2014, Periproducts Limited
in March 2016, Dentyl in August 2018, PharmaSource BV in 2020, BBI
Healthcare in June 2021, Helsinn in August 2021 and HL Healthcare
in November 2022 accounted for GBP38.8m of the intangible assets of
the Group (GBP35.8m at 31 December 2022). There was an impairment
of Goodwill of GBP389,000 (6 months to June 2022: GBPnil).
Development Brands Patents Goodwill Other Total
Costs and Trademarks Intangible
Assets
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ -------- ---------------- --------- ------------ --------
Cost or valuation:
------------ -------- ---------------- --------- ------------ --------
At 1 January 2022 4,049 20,093 979 35,483 10,727 71,331
------------ -------- ---------------- --------- ------------ --------
Acquired through - - - - - -
business combinations
------------ -------- ---------------- --------- ------------ --------
Additions 340 - 37 - - 377
------------ -------- ---------------- --------- ------------ --------
Disposals - - - - - -
------------ -------- ---------------- --------- ------------ --------
Foreign exchange 103 - 16 346 76 541
------------ -------- ---------------- --------- ------------ --------
At 30 June 2022 4,492 20,093 1,032 35,829 10,803 72,249
------------ -------- ---------------- --------- ------------ --------
Acquired through
business combinations - 9,282 - 3,407 2,628 15,317
------------ -------- ---------------- --------- ------------ --------
Additions 583 - 8 - - 591
------------ -------- ---------------- --------- ------------ --------
Disposals (84) - - - - (84)
------------ -------- ---------------- --------- ------------ --------
Foreign exchange 128 - 19 416 92 655
------------ -------- ---------------- --------- ------------ --------
At 31 December
2022 5,119 29,375 1,059 39,652 13,523 88,728
------------ -------- ---------------- --------- ------------ --------
Additions 411 - 3 - - 414
------------ -------- ---------------- --------- ------------ --------
Disposals - - - - - -
------------ -------- ---------------- --------- ------------ --------
Foreign exchange (182) - (20) (428) (94) (724)
------------ -------- ---------------- --------- ------------ --------
At 30 June 2023 5,348 29,375 1,042 39,224 13,429 88,418
------------ -------- ---------------- --------- ------------ --------
Amortisation:
------------ -------- ---------------- --------- ------------ --------
At 1 January 2022 2,112 822 511 - 2,807 6,252
------------ -------- ---------------- --------- ------------ --------
Charge for the
period 215 704 82 611 1,612
------------ -------- ---------------- --------- ------------ --------
Disposals - - - - - -
------------ -------- ---------------- --------- ------------ --------
Foreign exchange 56 - 8 - 50 114
------------ -------- ---------------- --------- ------------ --------
At 30 June 2022 2,383 1,526 601 - 3,468 7,978
------------ -------- ---------------- --------- ------------ --------
Charge for the
period 370 818 82 - 682 1,952
------------ -------- ---------------- --------- ------------ --------
Disposals (46) - - - - (46)
------------ -------- ---------------- --------- ------------ --------
Foreign exchange 73 - 10 - 67 150
------------ -------- ---------------- --------- ------------ --------
At 31 December
2022 2,780 2,344 693 - 4,217 10,034
------------ -------- ---------------- --------- ------------ --------
Charge for the
period 338 1,115 74 - 794 2,321
------------ -------- ---------------- --------- ------------ --------
Impairment charge - - - 389 - 389
------------ -------- ---------------- --------- ------------ --------
Disposals - - - - - -
------------ -------- ---------------- --------- ------------ --------
Foreign exchange (89) - (12) - (71) (172)
------------ -------- ---------------- --------- ------------ --------
At 30 June 2023 3,029 3,459 755 389 4,940 12,572
------------ -------- ---------------- --------- ------------ --------
Carrying amount:
------------ -------- ---------------- --------- ------------ --------
At 31 December
2022 2,339 27,031 366 39,652 9,306 78,694
------------ -------- ---------------- --------- ------------ --------
At 30 June 2022 2,109 18,567 431 35,829 7,335 64,271
------------ -------- ---------------- --------- ------------ --------
At 30 June 2023 2,319 25,916 287 38,835 8,489 75,846
------------ -------- ---------------- --------- ------------ --------
12. Property, Plant & Equipment
The carrying value of property, plant & equipment at 30 June
2023 reduced to GBP9.0m compared to prior year (30 June 2022:
GBP9.7m).
Plant Other Right Land Total
& Equipment Equipment of Use & Buildings
Assets
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ----------- -------- ------------- --------
Cost or valuation:
------------- ----------- -------- ------------- --------
At 1 January 2022 5,739 228 6,766 1,465 14,198
------------- ----------- -------- ------------- --------
Acquired through business - - - - -
combinations
------------- ----------- -------- ------------- --------
Additions 154 15 558 - 727
------------- ----------- -------- ------------- --------
Disposals - - - - -
------------- ----------- -------- ------------- --------
Foreign exchange 27 5 163 (22) 173
------------- ----------- -------- ------------- --------
At 30 June 2022 5,920 248 7,487 1,443 15,098
------------- ----------- -------- ------------- --------
Acquired through business
combinations - 13 - - 13
------------- ----------- -------- ------------- --------
Additions 681 10 476 - 1,167
------------- ----------- -------- ------------- --------
Disposals (45) - (325) - (370)
------------- ----------- -------- ------------- --------
Foreign exchange 83 8 201 (13) 279
------------- ----------- -------- ------------- --------
At 31 December 2022 6,639 279 7,839 1,430 16,187
------------- ----------- -------- ------------- --------
Additions 215 12 34 15 276
------------- ----------- -------- ------------- --------
Disposals (202) (2) - - (204)
------------- ----------- -------- ------------- --------
Foreign exchange (456) (8) (207) (97) (768)
------------- ----------- -------- ------------- --------
At 30 June 2023 6,196 281 7,666 1,348 15,491
------------- ----------- -------- ------------- --------
Depreciation:
------------- ----------- -------- ------------- --------
At 1 January 2022 1,749 140 2,527 45 4,461
------------- ----------- -------- ------------- --------
Charge for the period 388 12 405 50 855
------------- ----------- -------- ------------- --------
Disposals - - - - -
------------- ----------- -------- ------------- --------
Foreign exchange 8 4 63 (8) 67
------------- ----------- -------- ------------- --------
At 30 June 2022 2,145 156 2,995 87 5,383
------------- ----------- -------- ------------- --------
Charge for the period 433 15 468 50 966
------------- ----------- -------- ------------- --------
Disposals (43) - (325) - (368)
------------- ----------- -------- ------------- --------
Foreign exchange 30 4 87 (5) 116
------------- ----------- -------- ------------- --------
At 31 December 2022 2,565 175 3,225 132 6,097
------------- ----------- -------- ------------- --------
Charge for the period 420 16 521 49 1,006
------------- ----------- -------- ------------- --------
Disposals (202) (2) - - (204)
------------- ----------- -------- ------------- --------
Foreign exchange (271) (4) (99) (40) (414)
------------- ----------- -------- ------------- --------
At 30 June 2023 2,512 185 3,647 141 6,485
------------- ----------- -------- ------------- --------
Carrying amount:
------------- ----------- -------- ------------- --------
At 31 December 2022 4,074 104 4,614 1,298 10,090
------------- ----------- -------- ------------- --------
At 30 June 2022 3,775 92 4,492 1,356 9,715
------------- ----------- -------- ------------- --------
At 30 June 2023 3,684 96 4,019 1,207 9,006
------------- ----------- -------- ------------- --------
13. Share capital, share premium and merger reserve
Ordinary Ordinary Share
shares of shares premium Merger
0.3p each reserve
No. GBP'000 GBP'000 GBP'000
Audited at 31 December 2022 126,498,197 379 65,960 7,656
Unaudited at 30 June 2023 126,498,197 379 65,960 7,656
During the period 31 December 2022 to 30 June 2023 there has not
been a change in the shares issued.
14. Related party transactions
The following transactions with related parties are considered
by the Directors to be significant for the interpretation of the
Interim Condensed Financial Statements for the six-month period to
30 June 2023 and the balances with related parties at 30 June 2023
and 31 December 2022:
Key transactions with other related parties:
Braguts' Real Estate Srl (formally known as Biokosmes
Immobiliare Srl), a company 100% owned by Gianluca Braguti (a
Director and shareholder of the Group) provided property lease
services to the Development and Manufacturing business totalling
GBP218,964 in the six months to 30 June 2023 (GBP195,944 in the six
months to 30 June 2022). At 30 June 2023, the Group owed Braguts'
Real Estate Srl GBP43,680 (GBP32,449 at 30 June 2022). Biokosmes
Srl provided technical services to Braguts'Real Estate in the six
months to 30 June 2023 in the amount of GBP243 (GBP2,136 in the six
months to 30 June 2022). At 30 June 2023 Bragut's Real Estate owed
to the Group GBPnil (GBPnil at 30 June 2022).
15. Financial instruments
Set out below is an overview of financial instruments held by
the Group as at:
30-Jun-23 30-Jun-22 31-Dec-22
Loans Total Loans Total Loans Total
and receivables financial and financial and financial
assets receivables assets receivables assets
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial assets:
Trade and other
receivables (a) 12,785 12,785 12,173 12,173 16,152 16,152
Cash and cash
equivalents 3,658 3,658 5,393 5,393 5,631 5,631
Total 16,443 16,443 17,566 17,566 21,783 21,783
------------------- ----------- --------------- ----------- --------------- -----------
30-Jun-23 30-Jun-22 31-Dec-22
Liabilities Total Liabilities Total Liabilities Total
(amortised financial (amortised financial (amortised financial
cost) liabilities cost) liabilities cost) liabilities
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial liabilities:
Trade and other payables
(b) 8,912 8,912 11,057 11,057 11,725 11,725
Lease obligations 4,018 4,018 4,470 4,470 4,571 4,571
Interest bearing 19,004 19,004 8,528 8,528 22,275 22,275
Total 31,934 31,934 24,055 24,055 38,571 38,571
------------ ------------- ------------ ------------- ------------ -------------
(a) Trade and other receivables excludes prepayments.
(b) Trade and other payables excludes deferred revenue.
16. Alternative performance measures
The Group uses certain financial measures that are not defined
or recognised under IFRS. The Directors believe that these non-GAAP
measures supplement GAAP measures to help in providing a further
understanding of the results of the Group and are used as key
performance indicators within the business to aid in evaluating its
current business performance. The measures can also aid in
comparability with other companies who use similar metrics.
However, as the measures are not defined by IFRS, other companies
may calculate them differently or may use such measures for
different purposes to the Group.
Measure Definition Reconciliation to GAAP measure
EBITDA and Adjusted EBITDA Earnings before interest, tax, Note a below
depreciation, amortisation and
impairment (EBITDA)
and Adjusted EBITDA which is defined as
EBITDA excluding share-based payment
charges and exceptional
items.
Operating profit before amortisation and Operating profit before amortisation and Note b below
exceptional items exceptional items.
Underlying cash from operations Cash from operations excluding payment Note c below
for exceptional costs.
Cash conversion Underlying cash from operations as a Note d below
percentage of Adjusted EBITDA.
Free cash flow Free cash flow is defined as net cash Note e below
generated from operations less cash
payments made for
leases and capital expenditure.
Net debt Net debt is defined as the Group's gross Note f below
bank debt position net of cash.
Net leverage Net leverage calculated as net debt Note g below
(excl. finance leases) and using
proforma (2) Adjusted
EBITDA on a trailing 12-month basis.
Proforma Proforma figures compare financial Not needed
results in one period with those for the
previous period,
excluding the impact of acquisitions and
disposals made in either period. For
2022, like-for-like
revenue includes HL Healthcare Ltd which
was acquired in December 2022
a) EBITDA and Adjusted EBITDA Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Operating profit 383 438 2,227
Add back:
Depreciation 1,006 855 1,821
Amortisation 2,321 1,612 3,564
Impairment charge 389 - -
EBITDA 4,099 2,905 7,612
Add back:
Share-based payment charge 120 120 72
Exceptional costs 217 300 1,278
Adjusted EBITDA 4,436 3,325 8,962
------------ ------------ -----------
b) Operating profit before amortisation Six months Six months Year ended
and exceptional items
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Operating profit 383 438 2,227
Add back:
Amortisation 2,321 1,612 3,564
Impairment charge 389 - -
Exceptional costs 217 300 1,278
Operating profit before amortisation
and exceptional items 3,310 2,350 7,069
------------ ------------ -----------
c) Underlying cash from operations Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Cash from operating activities 4,066 1,762 6,187
Exceptional costs paid in period 707 84 488
Underlying cash from operations 4,773 1,846 6,675
--------------- -------------- ---------------
d) Cash conversion Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Cash generated by operating activities 4,066 1,762 6,187
Add back:
Exceptional costs paid 707 84 488
------------ ------------ -----------
Adjusted cash generated by operating
activities 4,773 1,846 6,675
------------ ------------ -----------
Adjusted EBITDA 4,436 3,325 8,962
------------ ------------ -----------
Cash conversion 108% 56% 74%
e) Reconciliation of free cash Six months Six months Year ended
flow
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Net cash generated by operating
activities 3,696 1,443 5,566
Capital expenditure (656) (546) (1,706)
Lease payments (479) (433) (992)
Free cash flow 2,561 464 2,868
------------ ------------ -----------
f) Net debt / (cash) Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Cash and cash equivalents (3,658) (5,393) (5,631)
Interest bearing borrowings - Deferred
contingent consideration - current - - 2,947
Interest bearing borrowings - Bank
Loans - non-current 16,898 8,528 17,314
Interest bearing borrowings - Subordinated
Loan (deferred consideration) -
non-current 2,106 - 2,014
Net debt (excl finance leases) 15,346 3,135 16,644
Interest bearing borrowings - Leasing
obligations - current 761 786 920
Interest bearing borrowings - Leasing
obligations - non-current 3,257 3,684 3,651
Net debt (incl finance leases) 19,364 7,605 21,215
--------------------- --------------------- ----------------
g) Net leverage Six months Six months Year ended
30-Jun-23 30-Jun-22 31-Dec-22
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Net debt (excl finance leases) 15,346 3,135 16,644
------------ ------------ -----------
Proforma (2) adjusted EBITDA(3)
on a trailing 12-month basis
Adjusted EBITDA 4,436 3,325 8,962
Adjustment to increase adjusted
EBITDA to trailing 12 month basis
- as reported 5,637 4,660 -
Adjustment to include mid year acquisition
on trailing 12 month basis 1,391 - 2,110
12 month trailing adjusted EBITDA 11,464 7,985 11,072
deduct:
Lease payments for 12 month period (1,041) (840) (992)
Adjusted EBITDA for net leverage 10,423 7,145 10,080
------------ ------------ -----------
Net leverage 1.47x 0.44x 1.65x
17. Post Balance Sheet Event
There are no post balance sheet events .
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END
IR FIFSTALISFIV
(END) Dow Jones Newswires
September 25, 2023 02:00 ET (06:00 GMT)
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