Innovaderma Share Discussion Threads

[che7win] 05/5/2017 12:06

QS, Agreed, the gross margin isn't the clear picture. Right now, the business isn't generating any cash despite that high gross margin a overheads eat up the cash.There will be a gearing effect, but the jury is out. They had to triple marketing spend to achieve sales, admin expenses and staff costs doubling.But the production move will help this half, I think they need much higher marketing spend, and those gross margins surely can't be maintained, competition will go after them.Interesting business, next accounts will be needed to assess.

[che7win] 05/5/2017 11:55

Just don't get carried away, even if profits are significantly higher than broker, you're approaching forward P/E 40-50 here.

Very punchy, and they probably need another £1.5m to keep going.

It is an interesting play on growth, DYOR.

They should concentrate on skinny tan and drop the other businesses IMHO, margins will inevitably fall here but maybe they can outgrow that. We shall see.

[hottingup] 05/5/2017 11:50

Headmaster Helmet approval from FDA soon with commercial launch expected later this year - Slide 10 of the Feb 2017 presentation:

www.innovaderma.com/wp-content/uploads/2017/02/InnovaDerma-Interim-Results-Presentation.pdf

Prolong device launch expected 2018.

Revenues building on all fronts - Skinny Tan a huge success and outselling the opposition.

Takeover potential.

Market capitalisation should be a couple of hundred million £'sss

[qs99] 05/5/2017 11:48

che7 mate, the operational leverage on this needs to be proven I agree, let's see what the next RNS with detail shows and hopefully a decent broker note comes out, but 65% is gross margin not net margin.....if say it gets to say £20m turnover (not impossible for year to June 18 or be more prudent June 19) what do you think the underlying EBITDA on ST alone could be?.....this is not without its risks I totally agree, but the market obviously IMO likes the story at the moment..gla and DYOR

[zico01] 05/5/2017 11:46

booboon yes April is a record as sales are growing very strongly May and June will also be records. We have ASOS selling ST from June.

[kemche] 05/5/2017 11:45

As long as they continue to raise the top line then operational gearing will take care of the rest.

[che7win] 05/5/2017 11:43

That is a good statistic, a well made point. However, right now, you are paying 100 times profits historically, probably 50 times current year profits. That is high, albeit the business is from a low base. You need 50% growth, year in, year out to sustain these prices IMHO. I think 150p is safe area to buy, I am not brave enough to buy at this price.The growth may well be possible, but no business can expect to sit on 65% margins and not expect heavy competition.Especially in a business that has no patents for tanning, anyone can copy it and the competition will not watch without a fight.As example, you can buy sun cream in Poundland for £1 all day long, margins used to be high, not anymore.Tanning is a commodity, it uses natural ingredients that the competition can copy and undercut.Don't expect those margins to last, maybe that's why they are so interested in hair loss and premature ejaculation. Which at least have high barriers to entry, whether they are successful or not is another matter.All IMHO, don't follow the herd, it's dangerous.

[boonboon] 05/5/2017 11:43

So we know revenue for the second half is currently well over £2.4million (3 x previous record of £800,000). I'd guess it's well over £3million as £800,000 is conservative for these months and I'd have thought February would be at least £600,000.

[boonboon] 05/5/2017 11:40

Zico01 April is now the record month. Trading continues to be very robust and revenue growth has continued on its positive momentum with April acheiving the highest-ever monthly revenue.

[qs99] 05/5/2017 11:39

Interesting Zico, so if they are say £2m over broker forecasts on sales, assume c.60% drop through to GP (broker note for 17 is roughly that DYOR), what incremental admin costs associated with that over delivery? but either way you could add c.£0.75-1m on to the underlying profit figure is that where you get to? DYOR etc......be fascinating to see, but then if run rate is £10m a year and rising, then 2018 forecasts......well brokers need to start scribing and I hope management get a decent one on board as house broker smartish so we can all see!
DYOR and IMO etc etc

[bigfrocks] 05/5/2017 11:34

Chew, crawl back in that norty little hole son

[zico01] 05/5/2017 11:34

Looking forward to year end Trading Update ;


Take a look at these figure's. Only one broker at the moment and its forcast for year ending June 2017 are:

T/O £6.95m PROFIT B TAX £0.7m EPS 4.92p

We already know T/O for 6 months to December 2016 was £3.187m (+125% ).The broker is
implying that 2nd half June 2017 T/O will only be £3.763m ( £6.95m - £3.187m ). The broker will need to upgrade its forcast considerably given the company has already said January was a record as was March. April May and June are seasonally strong months for tanning.We know Skinny Tan is the best seller in Superdrug its also doing very well in North America. It also expects to secure further E-tailers in 4th Qtr The company is clearly gaining traction and the broker thinks 2nd half T/O will only be £3.763m. I think 2nd half sales will be at least £5.0m to £6.0m making 12 month T/O of £8.2m to £9.2m. The company can give a full year Trading Update well before the year end if it knows it is doing better than market expectations. Clearly the broker is very conservative with its forcast.The company is trading significantly ahead of these forcasts.

[che7win] 05/5/2017 11:26

Why have none of the recent statements mentioned profits or cash flow?Those naughty MMs, don't they know Revenue is vanity. Profit is sanity. Cash is reality.You guys keep the party going, as long as some other numpty buys after you, you'll be just fine.

[kemche] 05/5/2017 11:23

chetwin, loving the display of IQ.
Please do continue and don't hide it under a bushel!

[onjohn] 05/5/2017 11:22

Goldman Sachs boss Lloyd Blankfein warns London could 'stall' after Brexit


Yeah

[che7win] 05/5/2017 11:21

Marketing costs nearly tripled, admin expense doubled, wages doubled.

What is the profits forecast, anyone have the latest? Revenue is growing fast, there is a lag in profits, will they need more cash soon?

[zico01] 05/5/2017 11:11

Zak Mir raised price target to £3.50.

[che7win] 05/5/2017 11:11

Latest half year accounts, IDP have gone from profit to loss and negative cashflow from operating activities nearly doubled, does that help?

This business is growing revenue, but burning cash from latest accounts.

Hope that helps.

[brucie5] 05/5/2017 11:10

That's me out. Great trade. Hope it goes much higher for you guys.

[geheimnis2] 05/5/2017 11:04

wow! this looks extremely bullish

lovely chart?

[carlo sartori] 05/5/2017 11:03

Current P/E is totally irrelevant...................it is the future P/E that counts.

[che7win] 05/5/2017 11:02

Current P/E 110 chaps, keep buying..

[sigora] 05/5/2017 11:02

very narrow spread now , mms on the run