Innovaderma Share Discussion Threads

[shandypants2] 17/6/2020 14:19

Lord Lolly - Life Sciences, so essentially Prolong, generated £299k rev in 2019 and £102k the year before (albeit 2018 was in only 2 months).

Therefore, the 71% H1 increase is from a low base - maybe £100k increased to £170k (as marketing was only restarted in H2 last year).

Marketing costs appears to be limited, but targeted, too.

Yes it has huge potential but IDP as a small company has thus far only be able to spend limited resources on it and i can't see this changing massively going forward.

If it does a minimum of £500k via DTC in 2020 accounts i'll be reasonably pleased - but that's less than 5% of total revenues.

As Boon said, happy to be proved wrong

[lord loads of lolly] 16/6/2020 14:28

I beg to differ. Life Sciences is potentially a HUGE growth area, with far higher selling prices and margins than ST, Roots, Nuthing etc. Serving a different sector, it also diversifies risk nicely. Agreed, though, that they may not have the resource to fully exploit it currently. Doubt they'll ditch this division though. If they did, I'd bail out PDQ.

[bobbyaxlerod] 16/6/2020 13:43

I think you’re right.

I wouldn’t be surprised if they sold off life sciences to concentrate on their high growth areas.

There must be some value in selling them off, this could be used for addition marketing and distribution deals for ST and Nuthing.

[boonboon] 15/6/2020 15:33

I'd be more than happy to be proved wrong. I just don't think it's the focus right now.They also mentioned a Growlase wet products launch within 6 weeks and that hasn't happened as focus has, rightly imo, turned elsewhere.

[lord loads of lolly] 15/6/2020 14:47

Not sure that's quite the case, though progress does seem to have slowed. Haris was championing the Life Science sector, so his departure (despite being good news) may have hampered progress. But their 25 Feb 20 Trading Statement said:

"Life Science has made significant progress throughout the period and revenue for Prolong increased by 71% on the previous year as a result of DTC sales driven by online 'influencers', predominantly in the US. This growth comes from a low base, however we are pleased with the progress made through our digital channels. We believe this approach will give us a solid platform to market the product through other channels.

As previously announced, we have signed two major distribution agreements in Hong Kong and for the Gulf countries. The revenue from these agreements will be recognised once regulatory approvals are completed and our distributors are able to sell the products into aforementioned countries. Obtaining regulatory approvals is a long and arduous process but with our new manufacturer in Korea we are only awaiting ISO certification which should be completed within the next month.

The existing and forthcoming regulatory approvals will enable us to sell in the US, Australia, Hong Kong, China, Canada and the Gulf countries. We are currently in the process of working towards our CE mark with our agent which will open up the UK and European markets. We are in discussions with an Indian distributor and currently researching the South American market."

[boonboon] 15/6/2020 11:48

At the moment they're not really doing anything with Prolong. There are some registrations due, which might push things along, however they might have been delayed due to COVID-19.Even if they do get approved it's not something we currently have the team for to drive it forward.It's a completely different sell to the topical side and we've got plenty to concentrate on that side as well.Regarding the £4 I agree it won't be for some time. I'm looking at a 2 to 3 year timescale and only if things go to plan like I hope they will.

[lord loads of lolly] 15/6/2020 11:09

Just clarifying, as for some reason, ADVFN auto-edited my previous comment about Prolong to read "high share price" rather than "high selling price".

[lord loads of lolly] 15/6/2020 11:06

boonboon - I agree with a lot of what you say. Can't see a £4 share price happening any time soon though. Also, I think you underestimate the potential of Prolong. Its high share price and margin mean it has huge potential. And wasn't a significant Asian deal already on the horizon once necessary approvals had been obtained?

[kemche] 14/6/2020 22:14

boon, ADVFN have very kindly provided the Filter boon. I can testify that it is very effective indeed.

[boonboon] 14/6/2020 19:04

Are you suggesting I work for IDP? I can assure you I don't. I am a part owner of the business though, as a shareholder.It's funny you should say mention Thomson & Morgan getting half their business from their customer list.Last year 60% of our business was dtc and I'm sure the customer list played a big part in that.If it hadn't been for our SkinnyTan dtc business Nuthing wouldn't really have been able to get off the ground under current restrictions. So it's definitely good we have 700,000+ customers we can market too.

[solarsurfer] 14/6/2020 18:30

AND... If you work for the company your not going to give a bad report are ya ?

Not sure what the value of a customer list is ? You don't have many products, unlike say Thompson and Morgan, where a customer list is probably half of your business, catalogue mail outs etc. This company is only as good as their current products, and tomorrow is a different story !

[bobbyaxlerod] 14/6/2020 18:17

BoonBoon,

Many thanks for taking the time to write the update - very well presented and sounds like a very realistic summary of what could be achieved over the next couple of years.

Thanks again,

Bobby.

[talkman2] 14/6/2020 16:04

WhoSe Mark Ward ?

[bigfrocks] 14/6/2020 12:14

Boonboon one of the best summary's I've read , good stuff and totally agree. Sitting on my hands

[boonboon] 14/6/2020 09:22

It's very difficult to say. In February the house broker was saying £14.7million turnover for this year with profits of £1.8million cash of £2.2million and eps of 9.8p. For next year it had turnover of £16million profit of £2.2million cash of £2.9million and eps of 11.2p. So as you can see good growth and cash generation and it didn't include new potential growth drivers.However since the coronavirus lockdown they've stopped their forecasts. What we do know is the company expects to at least make £12.9million turnover this year, which is the same as last year. Imo that's impressive since retail has been significantly impacted during their peak period. I don't know what their profitability or cashflow is likely to be like, but they will make a profit and will have enough cash to drive the business forward.My personal opinion is that under normal circumstances we should see a regular £12million turnover and £2million profit contribution at least from SkinnyTan in the UK. I don't see too much growth in the UK tanning market as we're now in all Boots and Superdrug stores and in over 700 Tesco stores.That doesn't mean there aren't good growth drivers going forward. SkinnyTan in the USA seems to be growing well now after a difficult start. On the 26th of May the company said "The US customer base is up 50% from just under 60,000 at the end of December to more than 88,000 at the end of April, with sales up 324% from the same period last year". Now at the moment USA SkinnyTan sales are very low compared to the UK. Last year sales were around $370,000 however it looks like we now have some momentum behind us and a significant USA retail deal is not out of the question and that could be game changing. Overall the USA self tanning market is worth considerably more than the UK one. So it's not inconceivable we can match or overtake the UKs performance in the next couple of years.The next growth driver is Nuthing the new hair removal brand which unfortunately launched right at the start of lockdown so we haven't had a chance to see all the promotions or how it might take off. In May the company said. "The launch of Nuthing, our new range of hair removal products has seen continued growth in revenue week on week despite the very constrained retail environment. The brand is building market share in the category with DTC volumes increasing steadily, despite the absence of the planned retail launch in Superdrug stores".Now Nuthing if it takes off has the potential to be as big if not bigger than SkinnyTan. It's got universal potential unlike the self tanning market. We're currently in an exclusivity deal with Superdrug, but as retail has been preoccupied with the Coronavirus it remains to be seen what will happen to the planned launch events. As it stands the exclusivity is due to expire around March next year. So there is the possibility of further UK retail announcements for Nuthing from the final results onwards unless the exclusivity is extended.As well as having a big growth potential in the UK there is the potential for retail deals to be announced anywhere in the world. Innovaderma currently has Nuthing websites registered in Australia, France and Germany, although at the moment they all redirect to the UK website.The 3rd big growth driver imo is Roots. Their hair regrowth brand. It did £1.3million in sales last year, but has since stagnated and probably even declined. The good thing is they've reacted to this and have looked at the brand and are going to relaunch it in the autumn. "The relaunch of Roots is progressing well and has been presented to Boots who responded positively. A comprehensive package of products including new formats are ready to be delivered to the market at the appropriate time".Like Nuthing Roots has the potential to be sold worldwide. Plantur and Alpecin have a combined turnover of well over £100 million so there is an attractive target market. Hopefully they'll get the relaunch right and return the brand to growth.For me those 3 (SkinnyTan USA, Nuthing and Roots) are the three main growth drivers. However there are also other growth prospects although I don't see these having as much impact, but they could surprise on the upside.Charles and Lee their men's skincare brand is performing well in Australia, however turnover last year was only around £300,000. However they've since launched on DTC in the USA and are due to launch in the UK sometime this calendar year. A surprise retail deal for this could provide growth and again this is a brand that has the potential to be sold worldwide so we might get deals coming from anywhere. However it is a more saturated market so don't have as much hope for this as the other brands.Life sciences, which consists of the Prolong and Growlase devices, is currently on the back burner as the company concentrates on the other brands. Last year's sales were around £300,000. Although I don't expect much from this going forward. At some point once the other brands are up and running and the company has spare capacity and cash it might concentrate on these and they could provide growth, but I don't see it happening in the near future.It's far more Likely that they launch a new brand in a new category. This is what their intended aim is and they have previously said that their are already some in the pipeline behind Nuthing. However I expect the coronavirus has put a dent in the schedule. Imo they have plenty to concentrate on with the Nuthing launch and the Roots relaunch.Their customer lists are a very important asset imo. It enables them to cross sell their brands to their customers. It's the main reason they're still seeing week on week rises in Nuthing sales. As their brands gain more traction this cross selling ability should also improve.Indeed as they gain international retail and distribution relationships with one brand it makes it easier to launch their other brands with these retailers.To cut a long story short, I believe innovaderma has tremendous potential. I can realistically see in 2 to 3 years a profit contribution of £2million for each of the following; Skinny Tan UK, Skinny Tan USA, Nuthing and Roots. Even if we achieve have of that at £4million this should be worth £60 million or £4 a share.As always do your own research.

[bobbyaxlerod] 13/6/2020 17:25

What do you guys think the potential upside is on the stock? Be interesting to get your views.

[bigfrocks] 12/6/2020 20:05

Not a daft bloke!

[connor23] 12/6/2020 19:05

He is obviously keen!

[kenwright] 12/6/2020 18:27

RNS out......Mark Ward ups stake to 6%

[andyr42] 09/6/2020 14:03

Not many shares, good recent updates. Should be trading a lot higher with their portfolio of excellent products and tie ups with Boots, Tesco etc. But the biggest plus is their DTC channel, a platform to engage directly with customers and is key to their marketing campaigns. Digital strategy is paying dividends in these hard times and abodes well for the future.

[homebrewruss] 02/6/2020 16:24

MF indeed, plus much hair growth with less waxing available during lockdown :)

[stimulationengineer] 02/6/2020 15:49

Complaints from 2 to 3 years ago ????

[kemche] 02/6/2020 12:48

Up to date complaints from people who can all spellded propah like.

Filtered.

[mad foetus] 02/6/2020 12:19

Smooth beaver very popular with the UK Friday night crowd too, Nuthing could clean up down there