TIDMVLG
RNS Number : 2287A
Venture Life Group PLC
22 September 2022
22 September 2022
VENTURE LIFE GROUP PLC
("Venture Life", "VLG" or the "Group")
Unaudited interim results for the six months ended 30 June
2022
Strong trading in H1 demonstrating resilience of model and
continued confidence in full year outlook
Venture Life Group plc (AIM: VLG), a leader in developing,
manufacturing and commercialising products for the self-care
market, presents its unaudited interim results for the six months
ended 30 June 2022.
Financial Highlights
-- Revenue growth of +36% to GBP18.9 million (2021: GBP13.9 million)
-- Gross profit margin increased +55% to GBP7.7 million (2021:
GBP4.9 million), gross margin percentage increased 5.0 percentage
points to 40.6% (2021: 35.6%)
-- Adjusted EBITDA1 increased +74% to GBP3.3million (2021:
GBP1.9 million), Adjusted EBITDA(1) margin increased to 17.6%
(2021: 14.0%)
-- Operating profit GBP0.4 million (2021: loss of GBP0.2 million)
-- Profit before tax, amortisation and exceptional items GBP1.7 million (2021: GBP1.3 million)
-- Adjusted earnings per share2 1.43p (2021: 0.83p), Basic
earnings per share (0.18)p (2021: (0.37)p
-- Cash generated by operating activities of GBP1.8 million (2021: outflow GBP(0.6) million)
Commercial Highlights
-- Significant organic revenue growth delivered within the
recent acquisitions of BBIH and HICP at 10.2% and 5.5%
respectively, representing an overall combined growth of 9.5% from
these acquisitions (on a pro-forma(3) basis)
-- Six new deals signed, including new distribution partners for
Pomi-T in The Netherlands and Singapore plus an additional partner
for the Lift brand in Ireland.
-- Three in-market product launches through existing blue-chip
partners, including key launch in Brazil for BV treatment
-- Increased distribution achieved in Asda (Balance Activ), wilko (Dentyl) and B&M (Dentyl)
Post period end
-- Trading in line with management expectations and order book
is c30% ahead of the same time last year on a like for like basis
(excl. H1'23 orders)
-- A new five year distribution agreement completed on Balance Activ in Austria
-- Seven new in-market international product launches
1 Adjusted EBITDA is EBITDA before deduction of exceptional
items (see note 6) and share based payments (see note 15 for
reconciliation)
2 Adjusted earnings per share is profit after tax excluding
amortisation, exceptional items (see note 6) and share-based
payments
3 Pro-forma basis i.e. if the acquisitions had been in place for
all of the prior year
Jerry Randall, CEO of Venture Life Group plc commented: "I am
pleased to report these strong trading figures in the context of
the challenging economic and trading environment we are currently
experiencing and demonstrates the resilience of our business model
in the face of these headwinds. I congratulate the whole Venture
Life team for their outstanding agility, tenacity and commitment in
this first half. The acquisitions we made in 2021 are now fully
integrated into the business and have delivered growth as expected
in the first half of the year, and have contributed to our improved
gross margin percentage. Whilst operating cash conversion (before
working capital movements) has been high (94% of adjusted EBITDA(1)
), we have continued to invest in inventory to ensure we can supply
our customers. The supply chain challenges experienced in 2021 have
continued into 2022, in terms of both cost and availability,
particularly impacted by the significant increase in energy prices.
The support from our customers accepting the price increases that
we have put through during the first half of the year has gone some
way to mitigating the supply side cost increases. We have
encouraged customers to order further ahead in order that we can
guarantee supply, and I thank our customers for their proactivity
in this. There is no doubt that the coming 12 months will continue
to present challenges in the uncertain and volatile global
environment, but it also provides opportunities for us, including
the Group receiving many inbound enquiries from both existing and
new customers who have been let down by their current suppliers,
unable to supply in this challenging environment. We have traded
well in the first half of the year, and the second half continues
to progress in line with our expectations, and whilst we all face
uncertainties on the coming months, the Group expects to deliver
full year revenue and adjusted EBITDA(1) in line with market
expectations."
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
Cenkos Securities plc (Nomad and Joint Broker) 8900
Michael Johnson / Russell Kerr (Sales)
Stephen Keys / Camilla Hume (Corporate Finance)
+44 (0) 20 7496
Singer Capital Markets (Joint Broker) 3000
Jonathan Dighe (Sales)
Shaun Dobson / Alaina Wong (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 Active range in the area of women's intimate
healthcare, the Lift and Glucogel product ranges for hypoglycaemia,
Gelclair and Pomi-T for oncology support, 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.
Non-Executive Chair's Statement
The Group has seen continued momentum from the second half of
last year, delivering strong first half growth in revenue, gross
margin and adjusted EBITDA(1) against the comparative period not
withstanding ongoing disruption within the supply chain. We are
thankful for our exceptional people across our UK, Italy, Sweden
and The Netherlands businesses, being proactive in meeting the
challenges and the support of our customers. Whilst challenges
remain, there are signs that these have now plateaued and are
becoming more manageable.
The acquisitions of BBI Healthcare (BBIH) on 4 June 2021 and
Helsinn (HICP) on 6 August 2021 are strong brands enabling value
creation; they are continuing to perform well and have proven to be
valuable additions to the Group which have both delivered first
half growth and positively impacted gross margins, and we are
confident in their continued growth.
Our principal manufacturing site of Biokosmes has met the
increased customer demand, integrated our new acquisitions
extremely well and demonstrated consistency in this higher output
with capacity still available to continue our growth ambitions.
The combination of strength of our order book to date and
investment in inventory to secure the delivery of it underpins our
confidence in delivering full year results in line with market
expectations.
The Group still has a significant level of undeployed funds from
the Revolving Credit Facility that was put in place in June 2021,
and we are continuing to actively review a number of brands with
strong growth potential that could make use of this facility and
build on the strong acquisitions already made.
Paul McGreevy
Non-executive Chair
22 September 2022
Chief Executive Officer's Statement
Operating review
The Group delivered an overall 36% growth in revenues to GBP18.9
million (2021: GBP13.9 million) in the first half. On a pro-forma
basis, which assumes the acquisitions had been in place for all of
the comparative period, overall Group revenues have increased
GBP0.3m or 1.7% compared to the same period last year.
The recent acquisitions of BBIH and HICP contributed a
significant GBP6.3 million to first half revenues and achieved
growth of 9.5% over the same period last year on a pro-forma basis
i.e. if the acquisitions had been in place since the start of the
year.
Outside of these acquisitions, performance of the legacy
revenues were akin H1 with 2021 at GBP12.6 million (H1 2021:
GBP12.8 million). This revenue reflected growth of GBP0.4m / 4.6%
in the customer brands business, offset by lower revenues in the
VLG legacy brands of GBP0.6m / 14.3% in this first half as a result
of lower international sales which will be more weighted towards
the second half than in previous year. VLG legacy brands in the UK
were broadly in line with the previous year.
The Group comprises two segments: Venture Life Brands and
Customer Brands which respectively accounted for 52.8% and 47.2% of
first half revenues.
The Venture Life Brands business reported revenues of GBP10.0
million (H1 2021: reported GBP4.9 million). The revenue increase of
GBP5.1 million on a reported basis has been driven by the impact of
the recent acquisitions which contributed an incremental GBP5.7
million during the period, offset partially by a decline in the
legacy business of GBP0.6 million. On a pro-forma basis these
brands held flat year on year (H1 2021: pro-forma GBP10.0
million).
The Customer Brands business reported first half revenues of
GBP8.9 million, an increase of GBP0.4m / 4.6% over the previous
year. As well as developing and manufacturing the majority of the
Venture Life brands, this part of the business is also focused on
the development and manufacture of products on behalf of third
parties, sold under their brands.
In line with the Group's M&A strategy, the growth of the
higher margin VLG Brands exceed that of our Customer Brands and has
driven upwards the overall revenue contribution from our VLG Brands
and in turn driven continued improvement in gross margin against
the comparative H1 period. We expect this to increase going forward
through organic growth and as the Group continues to explore
selective brand acquisitions.
First half absolute Gross margin of GBP7.7 million increased
GBP2.7 million / 55% over the previous year (H1 2021: GBP4.9
million) and delivered a significant gross margin percentage
improvement of 5.0% to 40.6% (H1 2021: 35.6%). The positive step-up
in gross margin percentage has been driven by the newly acquired
brands of 6.2%, offset partially by an adverse 0.3% impact from
further cost increases (net of customer price increase VLG has
passed on) and an adverse product mix impact of 0.9% on the legacy
business due to a higher proportion of revenues coming from lower
margin customer brands than compared with the prior year.
The increased supply prices and transport costs have been widely
reported globally and we have not been immune to this. We
experienced these issues in 2021 and they are persisting in 2022.
There are challenges around price, availability and delivery lead
times of raw materials and packaging, that our team must manage
daily. Significant increased energy prices affect operational costs
and supplier component and material costs, with inflationary
pressure and logistic challenges. The Group has continued to use
mitigation strategies, passing on price increases where possible,
securing continuity of supply and fixing prices within the supply
base as well as sourcing alternative suppliers.
The Group generated adjusted EBITDA(1) of GBP3.3 million for the
year (2021: GBP1.9 million), an increase of 71.4% over the previous
year and delivered an Adjusted EBITDA(1) margin of 17.6% (H1 2021:
14.0%). Operating profit increased to GBP0.4 million (2021:
Operating loss GBP (0.2) million), an increase of GBP0.6 million
against the comparative period.
Venture Life Group (VLG) Brands
Across the VLG Brands portfolio, since the beginning of the year
there have been six new deals signed with our international
partners including new partnerships in Germany, Netherlands and
Singapore for Pomi-T, an additional partner for the Lift brand in
Ireland and the deal with our new Chinese partner for oral care
which was announced earlier this year. The online business has also
been expanded into Germany with Balance Activ which launched in Q2
2022.
There have been three new in-market product launches by our
partners in various countries including the launch of BV treatment
in Brazil which was a key opportunity identified from the BBIH
acquisition, and a further seven new launches that happened post
period end.
Oral Care - UltraDEX and Dentyl
Overall oral care revenues fell 8% to GBP2.2 million (H1 2021:
GBP2.4 million) through difficult market conditions in which the
mouthwash category has seen a downturn and whilst a risk may
persist for discretionary spend in this area, we feel that both
brands are well positioned and well distributed within the market
to weather any present or future challenges.
For Dentyl there was growth in sales through the value retailers
with wilko, Savers and Home Bargains although this was offset by a
weaker performance in grocery as consumers continue to migrate to
the value retail channels as per recent market data (source:
Nielsen). We believe that with our broad distribution base on
Dentyl, the growth seen in value retailers and new launches into
B&M that went live at the end of Q2, we are well placed to
mitigate any downturn in this category resulting from changes in
consumer discretionary spend at this time.
Within the international space, the launch of Dentyl in China
through our new partner Samarkand plc was delayed by three months
due to widespread lockdowns and although the goods have commenced
selling in the local market, continued lockdowns remain a
challenge. The development of these brands in this market will be
monitored closely.
Looking forward, we are expecting a premium grocer to launch
both Dentyl and UltraDex into their stores in Q4 of this year. We
remain confident that with increased usage occasions coming through
the latest data, coupled with the impact of distribution gains and
increased range offered online, we will see a recovery in the
second half revenue performance from these brands.
Women's Intimate Health - Balance Activ
On a global basis, Balance Activ delivered first half revenues
of GBP2.2 million (H1 2021: pro-forma GBP2.5 million) a reduction
of 9.4% versus the prior year. The performance against the
comparative period has been adversely impacted by the conflict
between Russia and the Ukraine which resulted in revenue loss from
the local distributor, further, revenues from the newly developed
fertility gel product which were included in the prior year
pro-forma have not repeated. Stripping out these adverse impacts,
the Balance Activ brand has delivered growth of 5% on the rest of
the business.
In the previous year, this brand grew 33% in the UK which had
been driven mostly by the annualization (full year impact) of
Amazon sales. Our teams have leveraged this online success and used
it as a platform to target new distribution opportunities in the
UK, with a major pharmacy chain confirming the listing of Balance
Activ NPD later this year. We have also increased the range offered
through online channels in UK and launched the brand online in
Germany in Q2 2022. Due to these factors, we expect to see revenue
growth in the second half of the year from the retail side of this
business.
Outside the UK, Balance Activ is currently launched in 26
countries with its largest partner, from which we expect to see
good growth over 2021 based on revenues to date and orders in hand.
In July 2021, the BV gel received registration approval in Brazil
from ANVISA, its regulatory body and the product will launch in H2
2022, the first shipment to this market was completed in Q1 2022.
In total, there have been three in-market launches for this product
in the first six months of 2022, and six new launches post
term.
With the initiatives already undertaken in the UK, coupled with
very visible second half revenues from our international partners,
we expect to see a good out-turn for the rest of this year for this
brand.
Diabetes Management - Glucogel and Lift
Last year we acquired two brands within the diabetic management
category - Glucogel and Lift. On a proforma basis, revenue for both
brands collectively grew by 28.9% to GBP3.2 million (H1 2021:
GBP2.5 million), driven by Lift, which is performing well across
all channels. The brand is performing particularly well online due
to increased traffic and has seen higher brand loyalty compared to
its competition in this space.
In addition, Glucogel remains as the number 1 prescribed product
for treating hypoglycaemia and is positioned towards more serious
attacks. Revenues grew by 0.2% in the first half of 2022 on a
proforma basis to GBP1.1 million. These revenues are protected by
equalization deals in place with key pharmacies and, as such, we
expect the business to remain steady moving forward through the
year.
Oncology Support - Gelclair, Pomi-T & Xonrid
On a proforma basis, revenues grew by 5% to GBP0.9 million (H1
2021: GBP0.8 million). Prior to the acquisition of these brands,
opportunities had been identified in key target markets and we have
made commercial progress with new partnerships signed for Pomi-T in
Germany, The Netherlands and Singapore. In addition, advanced
discussions are ongoing for Gelclair in USA, Brazil and Canada.
Nail & Foot Care Portfolio
Revenues for the first half were GBP0.9 million (H1 2021: GBP1.5
million). In The Netherlands, these products have delivered growth
against the comparative period and the UK has remained flat.
However, the international side of this business was impacted by
the loss of a key distribution partner, and we are currently
seeking new opportunities to replace these revenues. However,
second half revenues are set to be significantly stronger and are
underpinned by our order book.
Customer Brands
Revenues from Customer Brands increased by 5% to GBP8.9 million
(H1 2021: GBP8.5 million) with growth coming from good performance
of existing partners and new business gaining traction with key
partners. The impact of customer stocking and destocking seen in
the previous couple of years has levelled out and in turn we have
seen customer ordering return to more normalised patterns.
The Group has been able to leverage selected appropriate
opportunities where other third-party manufacturers have failed to
deliver. This is an opportunity that has been presented by the
challenging economic climate and increased regulation throughout
the industry, as more customers look for a reliable manufacturer
and supplier.
Revolving Credit Facility (RCF)
Last year, the Group obtained a RCF with its main bank,
Santander Group, alongside Silicon Valley Bank for GBP30 million
draw with an accordion facility for a further GBP20 million subject
to the banks' ratification.
At 30 June 2022, the Group has drawn net GBP8.5 million (Dec-21:
GBP8.5m), which has been used to pay down all other debt in the
Group and the first payment for HICP. If it had not been for a
significant inventory build through the first half of 2022 as
security against issues from the global supply chain, we would have
seen the facility reduce through cash generation.
The facility was called upon to make the second and final
payment in relation to the acquisition of HICP in August 2022 and
we expect the overall amount drawn to come back in line with the
end of June 2022 level of drawdown by end of the year, before any
further acquisitions.
We put the facility in place to utilise the cash generative
nature of the business to help fund future acquisitions without the
dilutive effect of an equity raise. The Group is continuing to
actively review a number of immediately earnings enhancing
acquisitions that it could make utilising this facility.
Focus on Sustainability
As a business we undertake many initiatives towards our goal of
becoming a more trusted, responsible and sustainable business.
Following the formation of an ESG Committee at the end of last
year, we have been focused on developing our drive towards
increased sustainability. The committee includes members from the
Group Board and employees from the business, and it engages with
all key stakeholders in this process - our aim is to become a
trusted, responsible and sustainable business.
Our 5-step approach:
-- Develop our ESG leadership team from a diverse and accurate
representation of our stakeholders - achieved Q4 2021.
-- Consult with stakeholders to align expectations in being a
trusted, responsible and sustainable business - achieved Q2
2022.
-- Use results of stakeholder consultation to identify our
priority goals and ensure alignment to the SDGs - achieved Q3
2022.
-- Create our KPIs, their baseline and measurement methods
against which to track progress - targeted for Q4 2022.
-- Regular reporting and transparency of progress to all our stakeholders in the future.
Good progress against our sustainability development goals has
been made so far in 2022, with the company achieving the Bronze
Sustainability Rating from Ecovadis for Biokosmes SRL, Italy, as
well as completion of the stakeholder consultation in Q2 2022. We
look forward to engaging with and informing all our stakeholders on
our further progress against these objectives in the future.
Summary & Outlook
The Group is delivering on its M&A strategy which has driven
a significant revenue and earnings improvement during the first
half following the two acquisitions made in the previous year. The
newly enlarged Group has seen momentum from the second half of last
year continue into 2022 with revenue, gross margin and adjusted
EBITDA(1) improvement being achieved against the comparative
period.
The start to the second half of the year has been very
encouraging, with the current order book significantly ahead of the
same time last year and revenue performing slightly ahead of
management's expectations at this time. The strong order book
reflects growth in the underlying business plus the effect of
customers proactively ordering further forward to help manage
supply chain disruption and secure stock, which gives us greater
visibility of revenues and confidence that the Group remains on
track to deliver in line with current market expectations.
Further commercial progress has been made since the period end,
including new distribution gains and expansion of existing
distribution in the UK, as well as advanced discussions ongoing
with potential new distribution partners.
The supply chain issues experienced in the previous year appear
to have plateaued, however, we are appreciative of our customers
supporting cost increases, whilst where possible mitigating further
price impact on input costs. The level of supply chain disruption
cannot be underestimated, and I am delighted with the work
performed by our teams to pro-actively manage the situation and
react to the needs of the business. The progress in the first half
of the year is now being built on with a very much larger order
book than the same time last year, which gives us good confidence
in delivering higher H2 revenues as expected.
The acquisitions made in the prior year introduced margin
accretive brands with high growth potential in new therapy areas
and have diversified the Group, reducing potential impacts of
discretionary spends in the current economic climate as well as
adding additional manufacturing capability. These coupled with the
proactive work to mitigate these difficult trading factors has
further strengthened the business and created new opportunities.
The operational priorities for the Group in the second half of the
year remain unchanged:
-- To invest in and drive organic growth of our VLG Brands, with
our partners and through innovation;
-- To manage the supply chain disruption to minimise impact on
our customers and our profitability;
-- To consider opportunities for earnings enhancing
acquisitions, utilising the substantially undeployed RCF; and
-- To progress our ESG agenda towards becoming a more trusted,
responsible and sustainable business
Jerry Randall
Chief Executive Officer
22 September 2022
[1] Adjusted EBITDA is EBITDA before deduction of exceptional
items (see note 6) and share based payments (see note 15 for
reconciliation)
2 Adjusted earnings per share is profit after tax excluding
amortisation, exceptional items (see note 6) and share-based
payments
3 Pro-forma basis i.e. if the acquisitions had been in place for
all of the prior year
Financial Review
Statement of Comprehensive Income
The Group reported revenue for the six-month period of GBP18.9
million, an increase of 36% over the GBP13.9 million reported in
2021, and gross profit of GBP7.7 million (H1 2021: GBP4.9 million),
an increase of 55% against the comparative period in the prior
year, with a gross margin percentage improvement of 5.0% to 40.6%
(H1 2021: 35.6%).
The gross margin percentage improvement has been driven by the
newly acquired brands of 6.0%, although partially offset by an
adverse 0.3% impact from further supply price and transport cost
increases which are quantified net of costs passed onto customers,
less an adverse product mix impact of 0.9% on the legacy business
due to a higher proportion of revenues coming from lower margin
customer brands than compared with the prior year.
Against the second half of last year, the gross margin has
decreased by 1.8% from 42.4%. The reduction reflects the adverse
impact of further cost increases of 1.5% for utilities, transport
and inputs, although we have been able to mitigate 1.3% of the
impact through customer price increases, an adverse mix impact of
2.1% arose from lower margin customer brands accounting for a
higher proportion of overall legacy business revenues, with other
efficiencies providing a positive impact of 0.5%.
Operating expenses increased in the period to GBP5.3 million
from GBP4.0 million in H1 2021, an increase of GBP1.3 million. Of
this increase, GBP0.5 million related to the inclusion of the BBIH
operation and GBP0.1 million from the HICP operation, plus
depreciation impact of GBP0.3 million, a further GBP0.2 million for
increased investment in advertising and promotional activities and
GBP0.2 million for additional headcount to strengthen the
administrative and commercial teams, leaving a balance of other
cost increases amounting to GBP0.1 million which included the
impact from general inflation.
Operating expenses also increased GBP0.9 million against the
last six months of the prior year (H2 2021: GBP4.4m). The increase
is attributable to additional headcount of GBP0.2 million,
increased advertising and promotional spend of GBP0.3m, increased
R&D investment of GBP0.1 million and other administrative costs
of GBP0.3 million which represents professional fees which will
reduce in the second half of the year.
Amortisation of GBP1.6m (H1 2021: GBP0.6 million) increased
significantly due to the acquisitions made in the previous
year.
H1 2022 generated a positive adjusted EBITDA(1) (defined as
EBITDA(1) excluding share based payments and exceptional items) of
GBP3.3 million, an increase of 71.4% (2021: GBP1.9 million) at a
margin of 17.6% (2021: 14.0%).
Exceptional costs of GBP0.3 million (2021: GBP0.7 million)
related to warranty insurance costs associated with the completion
of the acquisition of BBIH which are being prepaid over two years,
plus compensation payments and to a much lesser extent, final
integration costs associated with prior year acquisitions.
Operating profit increased by GBP0.6 million to GBP0.4 million
(2021: loss of GBP0.2 million). The improvement in operating profit
against the comparative period reflects the Adjusted EBITDA(1)
growth of GBP1.4 million, plus reduction in exceptional costs of
GBP0.4 million, less increased depreciation and amortisation
charges of GBP1.2 million.
The Group reported a loss after tax of GBP0.3 million (2021:
loss of GBP0.5 million). Net finance costs increased to GBP0.7
million (2021: GBP0.1 million) and comprised interest on the
Group's new revolving credit facility entered in June 2021 of
GBP0.3 million and adverse impact from foreign exchange movement of
GBP0.4 million.
These translated into adjusted earnings per share (defined as
earnings per share before amortisation, share based payments and
exceptional items) of 1.43 pence (2021: 0.83 pence), an improvement
of 0.60 pence, with the improvement in business performance
generating enhanced shareholder value. A basic loss per share of
0.18 pence was an improvement of 0.19 pence against the prior
period (2021: loss per share 0.37 pence).
Statement of Financial Position
Non-current assets including goodwill increased by GBP3.8
million to GBP76.1 million (H1 2021: GBP72.3 million). The key
drivers of the increase has been intangible asset additions arising
from the HICP acquisition completed on 6 August 2021 of GBP5.1
million, the recognition of a deferred tax asset of GBP2.1 million,
additions to RoU assets of GBP0.6 million related mainly to
extension of the warehousing agreements in the UK, capital
expenditure on property plant and equipment of GBP0.3 million plus
additional development costs of GBP0.6 million which have been
offset by depreciation and amortisation charges of GBP4.9
million.
Inventory increased to GBP11.5 million (H1 2021 GBP9.8 million),
the significant increase reflected production planning requirements
for the second half of the year, as supported by the strong order
book which has provided excellent visibility over these revenues
and enabled the business to secure components much further in
advance than prior years.
Trade and other receivables increased to GBP12.6 million (H1
2021: GBP10.1 million) as expected given the increased revenue
compared to the same period last year. Trade payables increased to
GBP11.1 million (H1 2021: GBP7.9 million) driven by the investment
in inventory and to a much lesser extent the timing of other
operating costs on a higher base.
Cash flow and net debt
The Group is financed by a revolving credit facility, secured
against the assets and profits of most subsidiaries within the
group and with expiry in June 2024. This facility was established
last year in the committed sum of GBP30.0 million of which GBP8.5
million had been drawn at 30 June 2022.
At 30 June 2022, cash and cash equivalents totalled GBP5.4
million (H1 2021: GBP7.9 million) (31 Dec 2021: GBP5.2 million).
The increase of GBP0.2 million since the end of last year reflected
the following key movements:
-- Operating cash inflow before movements in working capital of
GBP3.1 million (H1 2021: GBP1.1 million);
-- Less a negative working capital flux of GBP1.3 million (H1
2021: negative flux of GBP1.7 million) driven by the inventory
build outlined above;
-- Less tax paid of GBP0.3 million to give rise to an overall
net cash inflow from operations of GBP1.4 million (H1 2021: outflow
of GBP0.9 million);
-- Less cash used in investing activities of GBP0.5 million to
fund capital expenditure (H1 2021: GBP0.4 million);
-- Less cash outflow from financing activities of GBP0.6m which
include net repayments against interest bearing borrowings of
GBP0.1 million plus interest paid of GBP0.3 million and leasing
obligation repayments of GBP0.4 million less net proceeds from
issuance of ordinary shares of GBP0.2 million;
-- Less an adverse impact from net foreign exchange of GBP0.2 million
Total debt including finance lease obligations decreased to
GBP13.0 million (H1 2021: GBP13.9 million). Net debt excluding
finance lease obligations increased to GBP3.1 million (H1 2021:
GBP1.3 million) and Net debt including finance lease obligations
increased to GBP7.6 million (H1 2021: GBP6.0 million).
Daniel Wells
Chief Financial Officer
22 September 2022
[1] Adjusted EBITDA is EBITDA before deduction of exceptional
items (see note 6) and share based payments (see note 15 for
reconciliation)
2 Adjusted earnings per share is profit after tax excluding
amortisation, exceptional items (see note 6) and share-based
payments
3 Pro-forma basis i.e. if the acquisitions had been in place for
all of the prior year
Unaudited Interim Condensed Consolidated Statement of
Comprehensive Income
For the six months ended 30 June 2022
Note Six months ended Six months ended Year ended
30-Jun-22 30-Jun-21 31-Dec
2021
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Revenue 4.1 18,860 13,866 32,762
Cost of sales (11,203) (8,927) (19,804)
--------------------- ----------------- -----------
Gross profit 7,657 4,939 12,958
Operating expenses (5,309) (4,026) (8,441)
Impairment losses of financial
assets (75) 162 134
Amortisation of intangible assets 5 (1,612) (631) (2,287)
--------------------- ----------------- -----------
Total administrative expenses (6,996) (4,495) (10,594)
Other income 77 122 338
Operating profit before exceptional
items 738 566 2,702
--------------------- ----------------- -----------
Exceptional items 6 (300) (728) (1,331)
Operating profit/(loss) 438 (162) 1,371
--------------------- ----------------- -----------
Finance income - 184 89
Finance costs (679) (62) (514)
(Loss)/Profit before tax (241) (40) 946
--------------------- ----------------- -----------
Tax 7 9 (428) 1,456
(Loss)/Profit for the period attributable
to the equity shareholders of the
parent (232) (468) 2,402
--------------------- ----------------- -----------
Other comprehensive income/(loss)
which may be subsequently reclassified
to the income statement 8 763 (1,219) (1,543)
Total comprehensive profit/(loss)
for the period attributable to
equity shareholders of the parent 531 (1,687) 859
--------------------- ----------------- -----------
Basic (loss)/profit per share (pence)
attributable to equity shareholders
of the parent 9 (0.18) (0.37) 1.91
Diluted basic (loss)/profit per
share (pence) attributable to equity
shareholders of the parent 9 (0.18) (0.37) 1.79
Unaudited Interim Condensed Consolidated Statement of Financial
Position
As at 30 June 2022
Note 30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
ASSETS GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 10 64,271 61,678 65,079
Property, plant and equipment 11 9,715 10,634 9,737
Deferred tax 7 2,502 - 2,349
76,488 72,312 77,165
--------------------- -------------------- -------------------
Current assets
Inventories 11,491 9,784 9,019
Trade and other receivables 12,637 10,117 12,212
Cash and cash equivalents 5,393 7,896 5,235
--------------------- -------------------- -------------------
29,521 27,797 26,466
--------------------- -------------------- -------------------
TOTAL ASSETS 106,009 100,109 103,631
--------------------- -------------------- -------------------
EQUITY & LIABILITIES
Capital and reserves
Share capital 12 379 377 377
Share premium account 12 65,960 65,738 65,738
Merger reserve 12 7,656 7,656 7,656
Foreign currency translation
reserve 649 210 (114)
Share-based payment reserve 976 810 856
Retained earnings (1,581) (4,219) (1,349)
--------------------- --------------------
Total equity attributable to
equity holders of the parent 74,039 70,572 73,164
--------------------- -------------------- -------------------
LIABILITIES
Current liabilities
Trade and other payables 11,063 7,921 9,717
Taxation 349 561 188
Interest bearing borrowings - - 5,004 -
Bank Loans
Interest bearing borrowings - - 680 -
Receivables Finance
Interest bearing borrowings -
Leasing Obligations 786 477 620
--------------------- -------------------- -------------------
12,198 14,643 10,525
--------------------- -------------------- -------------------
Non-current liabilities
Interest bearing borrowings -
Bank Loans 8,528 3,505 8,483
Interest bearing borrowings -
Leasing Obligations 3,684 4,213 3,626
Statutory employment provision 1,240 1,126 1,236
Deferred tax liability 7 6,320 6,050 6,597
--------------------- -------------------- -------------------
19,772 14,894 19,942
--------------------- -------------------- -------------------
TOTAL LIABILITIES 31,970 29,537 30,467
--------------------- -------------------- -------------------
TOTAL EQUITY & LIABILITIES 106,009 100,109 103,631
--------------------- -------------------- -------------------
Unaudited Interim Condensed Consolidated Statement of Changes in
Equity
As at 30 June 2022
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
2021
(Audited) 377 65,738 7,656 1,429 660 (3,751) 72,109
-------------- -------------- -------------- ---------------- ------------ --------------- ---------
Loss for the
period - - - - - (468) (468)
Foreign
exchange
for period - - - (1,219) - - (1,219)
-------------- -------------- -------------- ---------------- ------------ --------------- ---------
Total
comprehensive
income - - - (1,219) - (468) (1,687)
-------------- -------------- -------------- ---------------- ------------ --------------- ---------
Share options
charge - - - - 150 - 150
Transactions
with
Shareholders - - - - 150 - 150
Balance at
30 June 2021
(Unaudited) 377 65,738 7,656 210 810 (4,219) 70,572
-------------- -------------- -------------- ---------------- ------------ --------------- ---------
Profit for
the period - - - - - 2,870 2,870
Foreign
exchange
for period - - - (324) - - (324)
-------------- -------------- -------------- ---------------- ------------ --------------- ---------
Total
comprehensive
income - - - (324) - 2,870 2,546
-------------- -------------- -------------- ---------------- ------------ --------------- ---------
Share options
charge - - - - 46 - 46
Transactions
with
Shareholders - - - - 46 - 46
Balance at
31 December
2021
(Audited) 377 65,738 7,656 (114) 856 (1,349) 73,164
-------------- -------------- -------------- ---------------- ------------ --------------- ---------
Profit 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
-------------- -------------- -------------- ---------------- ------------ --------------- ---------
Unaudited Interim Condensed Consolidated Statement of Cash
Flows
For the six months ended 30 June 2022
Six months Six months Year ended
ended ended
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Cash flow from operating activities:
(Loss)/Profit before tax (241) (40) 946
Finance cost / (income) 679 (122) 425
--------------------- --------------------- -----------
Operating profit/(loss) 438 (162) 1,371
Adjustments for:
- Depreciation of property, plant
and equipment 855 593 1,415
- Impairment losses of financial
assets 75 (162) (134)
- Amortisation of intangible assets 1,612 631 2,287
- Share-based payment expense 120 150 196
--------------------- --------------------- -----------
Operating cash flow before movements
in working capital 3,100 1,050 5,135
(Increase)/decrease in inventories (2,282) 105 718
(Increase) in trade and other receivables (288) (1,231) (2,989)
Increase/(decrease) in trade and
other payables 1,232 (572) (908)
--------------------- --------------------- -----------
Cash generated by operating activities 1,762 (648) 1,956
Tax Paid (319) (293) (1,472)
Tax Receipt - - 117
--------------------- --------------------- -----------
Net cash from operating activities 1,443 (941) 601
Cash flow from investing activities:
Acquisition of subsidiaries, net
of cash acquired - (35,917) (35,917)
Purchases of property, plant and
equipment (169) (217) (371)
Expenditure in respect of intangible
assets (377) (218) (2,891)
--------------------- --------------------- -----------
Net cash used by investing activities (546) (36,352) (39,179)
--------------------- --------------------- -----------
Cash flow from financing activities:
Net proceeds from issuance of ordinary 224 - -
shares
Drawdown in interest-bearing borrowings 417 3,647 16,336
Repayment of interest-bearing borrowings (500) (170) (13,614)
Leasing obligation repayments (433) (402) (728)
Interest (paid) / received (272) 53 (492)
---------------------
Net cash from financing activities (564) 3,128 1,502
--------------------- --------------------- -----------
Net increase in cash and cash equivalents 333 (34,165) (37,076)
Net foreign exchange difference (175) (34) 216
Cash and cash equivalents at beginning
of period 5,235 42,095 42,095
--------------------- --------------------- -----------
Cash and cash equivalents at end
of period 5,393 7,896 5,235
--------------------- --------------------- -----------
Notes to the Unaudited Interim Condensed Consolidated Financial
Statements for the six months ended 30 June 2022
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 2022 ("the Interim
Financial Statements") were approved and authorised for issue in
accordance with a resolution of the directors on [21 September
2022].
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 2022. 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 2021 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 did not include 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 2021 Consolidated Financial Statements for
the year ended 31 December 2021.
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
ended ended
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
Average exchange rate for period 1.188 1.155 1.159
Exchange rate at the period end 1.162 1.164 1.191
Sterling/sek exchange rates Six months Six months ended Year ended
ended
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
Average exchange rate for period 12.439 11.771 11.780
Exchange rate at the period end 12.441 11.805 12.218
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 2021 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 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 Customer Eliminations Consolidated
Brands Brands Group
GBP'000 GBP'000 GBP'000 GBP'000
Six months to 30 June 2021
Revenue
External Sales 4,931 8,935 - 13,866
Inter-segment sales - 1,622 (1,622) -
Total revenue 4,931 10,557 (1,622) 13,866
-------- --------- ------------- -------------
Results
Operating profit before exceptional
items and excluding central
administrative costs 669 1,148 - 1,817
-------- --------- ------------- -------------
VLG Customer Eliminations Consolidated
Brands Brands Group
GBP'000 GBP'000 GBP'000 GBP'000
Twelve months to 31
December
2021
Revenue
External Sales 17,972 14,790 - 32,762
Inter-segment sales - 4,257 (4,257) -
Total revenue 17,972 19,047 (4,257) 32,762
-------- ------------- ----------------------- -------------------------
Results
Operating profit before
exceptional
items and excluding central
administrative costs 4,255 1,812 - 6,067
-------- ------------- ----------------------- -------------------------
The reconciliation of segmental Six months Six months Year ended
operating profit to the Group's ended ended
operating profit/(loss) before
exceptional
items excluding central administrative
costs is as follows:
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Operating profit before exceptional
items and excluding central
administrative
costs 2,433 1,817 6,067
Central administrative costs (1,695) (1,251) (3,365)
Exceptional expenses (300) (728) (1,331)
Operating (loss)/profit 438 (162) 1,371
Net finance cost (679) 122 (425)
(Loss)/profit before tax (241) (40) 946
------------ ------------------------ -----------------------
5. Amortisation of intangible assets
Six months Six months Year ended
ended ended
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
Amortisation of: GBP'000 GBP'000 GBP'000
Acquired intangible assets (611) (401) (877)
Patents, trademarks and other intangible
assets (786) (48) (1,002)
Capitalised development costs (215) (182) (408)
(1,612) (631) (2,287)
------------ ------------ -----------
6. Exceptional items
Six months Six months Year ended
ended ended
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Costs incurred in potential acquisitions (75) (728) (964)
Integration of acquisitions (89) - (261)
Restructuring costs (136) - -
Other - - (106)
(300) (728) (1,331)
------------------- ------------------- -------------------
The Group treats costs as exceptional items where their
frequency and nature warrant being separately classified. In the
six month period to 30 June 2022, the Group incurred acquisition
costs of GBP75,000 relate to professional fees associated with
potential M&A and other integration costs of GBP89,000 being
warranty insurance on the acquisition of BBIH which has been
prepaid, plus to a much lesser extent, costs incurred in completing
the integration of prior year acquisitions. Restructuring costs of
GBP136,000 include compensation for loss of office including
related professional fees.
7. 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 2022. The major components of income tax expense
in the Interim Condensed Statement of Comprehensive Income are as
follows:
Six months Six months Year
ended ended ended
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Current income tax (438) (428) (764)
Deferred income tax credit related to
origination and reversal of timing differences 447 - 2,220
Income tax credit/(expense) recognised
in statement of comprehensive income 9 (428) 1,456
------------ ------------------- ----------
The current income tax expense is based on the profits of the
businesses based in Italy, Netherlands and Sweden. 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
GBP10,163,000 (30 June 2021: GBP10,900,000; 31 December 2021:
GBP9,938,000). There has been an increase in tax losses since the
year end due to finalisation of the unused tax losses position
reported at 31 December 2021.
8. 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 2022 of 1.162 (at 31 December
2021 of 1.191 and at 30 June 2021 of 1.164) 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 2022 of 1.162. 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 2022 of 12.441 (at 31
December 2021 of 12.218 and at 30 June 2021 of 11.805). The result
is an amount that may subsequently be reclassified to profit and
loss.
9. Earnings per share
Six months Six months Year ended
ended ended
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
Weighted average number of ordinary
shares in issue 126,012,009 125,831,530 125,831,530
(Loss)/Profit attributable to equity
holders of
the Company (GBP'000) (232) (468) 2,402
Basic (loss)/profit per share (pence) (0.18) (0.37) 1.91
Diluted (loss)/profit per share
(pence) (0.18) (0.37) 1.79
Adjusted earnings per share 2 (pence) 1.43 0.83 4.94
Diluted Adjusted earnings per share
3 (pence) 1.37 0.78 4.65
2 Adjusted earnings per share is profit after tax excluding
amortisation, exceptional items and share based payments.
3 Diluted Adjusted earnings per share is profit after tax
excluding amortisation, exceptional items and share based payments,
diluted by the inclusion of 5,056,166 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 131,622,290 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.
10. 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 and Helsinn in August 2021 accounted for
GBP35.8 million of the intangible assets of the Group (GBP35.4
million at 31 December 2021). There were no impairments of goodwill
during this time (6 months to June 2021: GBP Nil).
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
2021 3,844 1,089 1,374 21,277 4,070 31,654
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Acquired
through
business
combinations - 16,994 - 13,128 5,788 35,910
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Additions 182 - 36 - - 218
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Disposals (1) - (389) - - (390)
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Foreign
exchange (175) - (42) (662) (145) (1,024)
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
At 30 June
2021 3,850 18,083 979 33,743 9,713 66,368
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Acquired
through
business
combinations - 2,010 - 2,049 1,082 5,141
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Additions 288 - 7 - - 295
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Disposals - - (7) - - (7)
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Foreign
exchange (89) - - (309) (68) (466)
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
At 31 December
2021 4,049 20,093 979 35,483 10,727 71,331
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
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
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Amortisation:
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
At 1 January
2021 1,837 - 740 - 2,053 4,630
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Charge for the
period 185 101 92 - 253 631
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Disposals (1) - (389) - - (390)
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Foreign
exchange (86) - (8) - (87) (181)
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
At 30 June
2021 1,935 101 435 - 2,219 4,690
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Charge for the
period 223 721 88 - 624 1,656
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Disposals - - (7) - - (7)
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Foreign
exchange (46) - (5) - (36) (87)
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
At 31 December
2021 2,112 822 511 - 2,807 6,252
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Charge for the
period 215 704 82 611 1,612
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Foreign
exchange 56 - 8 - 50 114
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
At 30 June
2022 2,383 1,526 601 - 3,468 7,978
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
Carrying
amount:
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
At 31 December
2021 1,937 19,271 468 35,483 7,920 65,079
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
At 30 June
2021 1,915 17,982 544 33,743 7,494 61,678
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
At 30 June
2022 2,109 18,567 431 35,829 7,335 64,271
-------------------- ------------------ -------------------- ------------------- ------------------- ----------------
11. Property, Plant & Equipment
The carrying value of property, plant & equipment at 30 June
2022 reduced to GBP9.7 million compared to prior year (30 June
2021: GBP10.6m). The main addition during the first six months of
the current year related to an extension of UK warehousing
agreements which have increased Right of Use Assets.
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 2021 3,702 233 6,485 - 10,420
-------------------- -------------------- -------------------- -------------------- --------
Acquired through
business
combinations 2,098 - - 1,513 3,611
-------------------- -------------------- -------------------- -------------------- --------
Additions 205 12 729 - 946
-------------------- -------------------- -------------------- -------------------- --------
Disposals - (11) - - (11)
-------------------- -------------------- -------------------- -------------------- --------
Foreign exchange (175) (10) (308) (4) (497)
-------------------- -------------------- -------------------- -------------------- --------
At 30 June 2021 5,830 224 6,906 1,509 14,469
-------------------- -------------------- -------------------- -------------------- --------
Acquired through
business
combinations - 2 - (3) (1)
-------------------- -------------------- -------------------- -------------------- --------
Additions 148 6 4 - 158
-------------------- -------------------- -------------------- -------------------- --------
Disposals (18) - - - (18)
-------------------- -------------------- -------------------- -------------------- --------
Foreign exchange (221) (4) (144) (41) (410)
-------------------- -------------------- -------------------- -------------------- --------
At 31 December 2021 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
-------------------- -------------------- -------------------- -------------------- --------
Depreciation:
-------------------- -------------------- -------------------- -------------------- --------
At 1 January 2021 1,303 134 1,965 - 3,402
-------------------- -------------------- -------------------- -------------------- --------
Charge for the
period 226 12 348 7 593
-------------------- -------------------- -------------------- -------------------- --------
Disposals - (11) - - (11)
-------------------- -------------------- -------------------- -------------------- --------
Foreign exchange (58) (5) (84) (2) (149)
-------------------- -------------------- -------------------- -------------------- --------
At 30 June 2021 1,471 130 2,229 5 3,835
-------------------- -------------------- -------------------- -------------------- --------
Charge for the
period 409 14 347 52 822
-------------------- -------------------- -------------------- -------------------- --------
Disposals (18) - - - (18)
-------------------- -------------------- -------------------- -------------------- --------
Foreign exchange (113) (4) (49) (12) (178)
-------------------- -------------------- -------------------- -------------------- --------
At 31 December 2021 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
-------------------- -------------------- -------------------- -------------------- --------
Carrying amount:
-------------------- -------------------- -------------------- -------------------- --------
At 31 December 2021 3,990 88 4,239 1,420 9,737
-------------------- -------------------- -------------------- -------------------- --------
At 30 June 2021 4,359 94 4,677 1,504 10,634
-------------------- -------------------- -------------------- -------------------- --------
At 30 June 2022 3,775 92 4,492 1,356 9,715
-------------------- -------------------- -------------------- -------------------- --------
12. 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 2021 125,831,530 377 65,738 7,656
Unaudited at 30 June 2022 126,498,197 379 65,960 7,656
During the period 1 January 2021 to 30 June 2022, 666,667 shares
were issued at GBP0.337 each totalling GBP224,666.78.
13. 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 2022 and the balances with related parties at 30 June 2022
and 31 December 2021:
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
GBP195,944 in the six months to 30 June 2022 (GBP199,134 in the six
months to 30 June 2021). At 30 June 2022, the Group owed Braguts'
Real Estate Srl GBP32,449 (GBP33,189 at 30 June 2021). Biokosmes
Srl provided technical services to Braguts'Real Estate in the six
months to 30 June 2022 in the amount of GBP2,136 (GBP1,861 in the
six months to 30 June 2021). At 30 June 2022 Bragut's Real Estate
owed to the Group GBPnil (GBPnil at 30 June 2021).
14. Financial instruments
Set out below is an overview of financial instruments held by
the Group as at:
30-Jun-22 30-Jun-21 31-Dec-21
Loans Total Loans Total Loans Total
and receivables financial and receivables financial and receivables financial
assets assets assets
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial assets:
Trade and other
receivables
(a) 12,173 12,173 9,386 9,386 11,701 11,701
Cash and cash
equivalents 5,393 5,393 7,896 7,896 5,235 5,235
Total 17,566 17,566 17,282 17,282 16,936 16,936
----------------- ----------- ----------------- ----------- ----------------- -----------
30-Jun-22 30-Jun-21 31-Dec-21
Loans Total Loans Total Loans Total
and financial and receivables financial and receivables financial
receivables liabilities liabilities liabilities
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial
liabilities:
Trade and other
payables
(b) 11,057 11,057 8,829 8,829 9,711 9,711
Lease
obligations 4,470 4,470 4,690 4,690 4,246 4,246
Interest
bearing 8,528 8,528 9,189 9,189 8,483 8,483
Total 24,055 24,055 22,708 22,708 22,440 22,440
--------------- ------------- ---------------- ------------- ---------------- -------------
(a) Trade and other receivables excludes prepayments.
(b) Trade and other payables excludes deferred revenue.
15. 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.
The measures used are Earnings before Interest, Tax,
Depreciation and Amortisation ( EBITDA) and Adjusted EBITDA(1)
which is defined as EBITDA(1) excluding share-based payment charges
and exceptional items.
Six months Year ended
Six months
30-Jun-22 30-Jun-21 31-Dec-21
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Operating profit/(loss) 438 (162) 1,371
Add back:
Depreciation 855 593 1,415
Amortisation 1,612 631 2,287
EBITDA 2,905 1,062 5,073
Add back:
Share-based payment charge 120 150 196
Exceptional costs 300 728 1,331
Adjusted EBITDA 3,325 1,940 6,600
----------------- ----------------- ----------------
16. Post Balance Sheet Event
There are no post balance sheet events .
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END
IR FFFFLAFILFIF
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