Venture Life Share Discussion Threads

[texas_caddy] 02/10/2020 10:45

Thanks nw99 - what section of IC is it in? I can't see on their website and not on ST article from yesterday.

[qs99] 02/10/2020 10:15

Great, 30% upside potential, and IMO more deals could lead to further upgrades....holding on for much higher...DYOR

[qs99] 02/10/2020 08:06

nice, thanks

[nw99] 02/10/2020 08:05

Tipped in IC again 130 target

[qs99] 01/10/2020 10:27

a few spotting value here

[rivaldo] 28/9/2020 15:47

There were a couple of interesting snippets in the latest Cenkos note...

- the sales potential for Kelo-Cote is reckoned to be over £50m, compared to current annualised sales of around £29m
- the impact of COVID on VLG in H1 was actually neutral, with the new hand sanitiser sales offsetting reduced revenues from elsewhere and increased staff safety costs. So the H1 results would actually have been achieved anyway in a "normal" period.

So this H2 and next year should see the benefit from both the recovery in trading in the core business PLUS continuing hand sanitiser sales.

[1jat] 25/9/2020 18:40

I expect the Covid trial will be inconclusive but that won’t stop them selling a lot of mouthwash.

[bountyhunter] 25/9/2020 16:49

With Covid getting worse, good results and the Cardiff trial in progress I can't see this dipping more than a touch below £1 myself which will probably be the new support level. More likely is weekend press coverage giving us a further boost on Monday.

[farnesbarnes] 25/9/2020 16:46

It does amuse me that my comment got a thumbs down. That a subscriber, someone who should theoretically appreciate a balanced view (buyers and sellers making a market) can't see that it might come down to 90p, at which point I would still be tempted to top up.

What might it take for it to come down again? Perhaps a study finding that Dentyl doesn't help in killing Covid 19?

I was derided for suggesting some might sell at 100p, and it drifted down 10% from there. And I do regret not topping up at 90p. But if there is another opportunity to top up sub 100, I won't hesitate.

[qs99] 25/9/2020 11:12

Not sure it will get there FB, I reckon more commercial deals will be in the offing, then we can't be too far away (weeks) from the University mouthwash update I think from memory, any new trading updates, M&A....list is endless, but price seems to be solidifying over a quid....GLA and DYOR

[farnesbarnes] 25/9/2020 09:05

No denying great results, time in the market and all that, but I see potential for it to drift down to circa low 90s again. At least, that's where I'd be tempted to top up.

[nw99] 25/9/2020 08:27

Time to add just bought more

[qs99] 25/9/2020 07:32

EV/EBITDA ratio would be a better valuation metric IMO as this starts to chuck off cash......thanks for posting above by the way

more deals, M&A possible, my initial target is £2.........and who knows, a divi may also be on the cards.....

think the DISINPLUS piece could be really neat, look what happened to BYOTROLs share price for instance.

Cheers all

[rivaldo] 25/9/2020 07:20

Here's Simon Thompson's new IC tip (cheers mate) with his 130p target:

"Venture Life on a roll

When a company with a relatively fixed cost base has the manufacturing capacity to materially increase sales, the impact on margins can be dramatic as a higher proportion of incremental revenue is converted into operating profit. That's exactly what's happening at Aim-traded Venture Life (VLG:102p), a developer, manufacturer and distributor of products for the self-care market, as its manufacturing business scales up production from both third-party contract work and brings production in-house from earnings accretive acquisitions.

The company has also been signing a raft of deals for its key brands. These include Dentyl and UltraDEX (mouthwashes, toothpastes, tooth whiteners and fresh breath beads), and the most recent acquisition, PharmaSource, a distributor of a range of medical device products (for fungal nail infections, wart removal and women's health).

Earlier this year Venture signed its largest deal to date, a 15-year agreement worth €168m (£154m) with its existing Chinese distribution partner (rights in China, Macau and Hong Kong) for Venture’s Dentyl brand (including mouthwashes, toothpastes, tooth whiteners and fresh breath beads) and other products. In the first half, the partner placed €4m of orders for Dentyl alone and contributed £2.3m to Venture’s revenue of £16.9m. The company’s like-for-like sales increased 65 per cent in the six-month period.

The company has also been launching new products including a hand sanitising gel, DISINPLUS, which has been flying off the shelfs at ASDA and at other retailers, contributing £3.2m to first half revenues. Venture has expanded the range to eight products, including anti-bacterial sprays, at minimal cost, thus providing another lucrative revenue stream for the years ahead. In the UK, Boots will launch the Dentyl range (including new products) across 800 of its key stores in November.

The impact of the eye-catching sales growth has been dramatic on Venture’s profitability. Gross profit doubled from £3.5m to almost £7m on £7.5m of incremental sales, and with operating costs only rising by £0.8m to £4m, the company’s underlying operating profit shot up to £2.3m, from break-even a year ago. Analyst Chris Donnellan at Cenkos expects full-year pre-tax profit to rise from £1.3m to £3.3m on revenue of £30.3m to produce adjusted earnings per share (EPS) of 5.3p, up from 2.2p in 2019. He has also introduced 2021 forecasts which point to pre-tax profit surging again to £4.6m on £3m higher revenue as a higher proportion of the extra gross margin earned falls to the bottom line. On this basis, expect 2021 EPS of 6p. These estimates exclude any contribution from further earnings enhancing bolt-on acquisitions. Venture has net cash of £6.6m (8p a share) to deploy and low-cost debt facilities, too.

The positive news flow explains why Venture’s shares have more than doubled in value since I outlined the investment case, at 45p, in my May 2019 Alpha Report, and are closing in on the 115p target price I outlined when I last suggested buying, at 92p, following the pre-close trading update (‘Targeting undervalued small-caps’, 24 August 2020). So, with the earnings risk firmly to the upside – Cenkos believe their forecasts are “conservative” – I feel that a cash-adjusted PE ratio of 16 for the 2021 financial year is still an attractive rating and raise my target to 130p. Buy."

[1jat] 24/9/2020 21:08

Management has always seemed highly credible to me.
They have been fortunate to have capacity and capability to exploit Demand for sanitising products.

A tiny company that will be taken out by a competitor if it gets too successful.

[energeticbacker] 24/9/2020 16:17

Investor's Champion's 'reasonably valued healthcare company' is looking good. The updated research covers the latets results and update

[qs99] 24/9/2020 14:43

haha Grange Hill tips now? ROwlANd....great re upgrade from ST....give it 6 months and further delivery hopefully, we will see that TP move towards and over £2 IMO and divis can't be ruled out...DYOR but a nice ISA stock

[buying] 24/9/2020 13:00

Sorry it wad Simon Thompson, yes it is further down

[rivaldo] 24/9/2020 12:32

I suspect that's the IC's Simon Thompson :o))

Can't see that online - is it lower down in today's article that starts with the kettle company?

130p sounds a fair value to aim for at this stage.

Cheers hastings - will read later.

[farnesbarnes] 24/9/2020 12:15

Jenkins? Wasn't he in Grange Hill?

[buying] 24/9/2020 12:05

Simon Jenkins raises target from £1.15 to £1.30

[hastings] 24/9/2020 12:00

Good to see a story come together and the results this morning were excellent.Didn't manage to speak with management today, but I've popped my original article below after a chat with the CEO with some thought from today for interest.Https://martinflitton1.wixsite.com/privatepunter/post/venturing-forth-venture-life-group-24-09-2020

[qs99] 24/9/2020 10:07

with the operational leverage, why should EBITDA margins not increase from 21%?

If hits 30% then with H1 trading run rate, why should 2021 not show c.£50-60m revenues? in which case you are looking at material double digit EBITDA levels....then on to 2022 and you don't have to assume continued 80% growth rates, normalise them, you still get big numbers and cash thrown off.....DYOR etc, but if in 2-3 years time they are doing c.£20m EBIDA and multiple of say 15, why not, well you get the drift. And a divi?

DYOR but in for the long haul