Venture Life Share Discussion Threads

[basem1] 19/2/2021 10:20

The selling has been relentless here Finally a clean slate and buyers to return. The price has done well to be where it is.

[red ninja] 19/2/2021 09:45

I believe DSM paid 90p per share in the below open offer :-



I've added in the 80's on the basis that if they make a good aquisition or two the upward trend will be resumed.

[rivaldo] 19/2/2021 08:21

Thanks Simon - beat me to it :o))

For the record, Downing (Strategic, not Street!) also state elsewhere in their letter:

"We also invested into Venture Life, a leader in developing,manufacturing and commercialising products for the self‐care market, which we have followed for some time through our ownership in other funds and which we think has reached an interesting juncture with significant growth prospects."

[simon gordon] 19/2/2021 07:25

Downing Street Micro Cap letter - 19/2/21:

VENTURE LIFE was announced as a new position towards the end of 2020, although it is a company that we have followed for the best part of two years. We built our position over the course of last year as our investment case continued to play out, and as other significant developments unfolded.

Firstly, our investment case which centred around increasing own‐brand product diversification, utilising latent capacity within the manufacturing base which in turn should unlock significant operational gearing. This is due to a relatively fixed cost base and margin accretion from increased mix towards own‐brand products. Progression along this line of thinking was most noticeable in the half results, in which an 80% increase in revenue resulted in nine‐fold increase in adjusted profit before tax, which eclipsed the profits made in the whole of the previous financial year. Despite these impressive results, we believe that this is the beginning of this journey. Based on the half year results, management believe full year utilisation will be around 56%. Furthermore, 65% of the top line growth was organic, with 15% from 5 months of contribution from the PharmaSource BV which will deliver greater margin accretion as synergies are enacted and manufacturing is moved into Venture Life’s facilities. PharmaSource BV was acquired on similar multiples as previous acquisitions of <7x profit before tax, before synergies. Previous acquisitions are now trading on <3x profit before tax, following manufacturing integration, yet these acquisitions are still exhibiting double‐digit growth 2 to 4 years post acquisition. We believe these returns will manifest into impressive returns on capital invested as the business scales to utilise excess capacity and recycles capital into further growth. We were initially able to access this return profile for less than 9x earnings, which we felt was a steep discount to comparable businesses that are not as vertically integrated as Venture Life.
Additional developments during the year that are worth noting are as follows:

 Signing of an exclusive long‐term distribution agreement in China with minimum
purchase obligations worth €168 million over a 15‐year period.

 Ramped up production of hand sanitiser gel within 11 days to produce €3.2 million of revenue at the half year from zero before the pandemic. The initial investment was €110,000 and was initially designed to support Italian hospitals on a compassionate basis. But following strong demand from retailers, it evolved into DISINPLUS, a new range of anti‐bacterial products.

 Supported Cardiff University with both in‐vitro and in‐vivo studies of the effectiveness of mouthwashes containing Cetylpyridinium Chloride (CPC) in reducing Covid‐19 viral load within the mouth. The in‐vitro study proved 99.999% effectiveness within a 30 second exposure. The full results of greater lengths of time and the in‐vivo study are to be released in 2021.

 Raised £36 million of equity in December to pursue acquisitions that will accelerate the path towards utilising latent manufacturing capacity. Whilst Venture Life has somewhat benefitted from the Covid‐19 outbreak, this was never part of our original investment case. However, this has highlighted the additional optionality to create value that is embedded in the manufacturing base and the expertise which can be leveraged to extend product lines of existing and acquired product portfolios.

[mallorca 9] 11/2/2021 10:42

Regained my nerve and good sense (I need to stop reading this Board)

JUST TOPPED UP - and quite significantly.

[qs99] 10/2/2021 15:22

indeed Riv, but only bargain if we can see the management put placing and director sales behind them and deliver their 1st M&A piece and continued solid organic growth IMO...that will then see us through a quid again IMO....

Cheers and hope all well with you Riv
QS99

[rivaldo] 10/2/2021 13:35

Bargain time imho. Good to see buying at the full 85p offer price.

[qs99] 10/2/2021 10:28

are we finally, finally going to see a protracted bounce and some M&A?

[mallorca 9] 08/2/2021 18:40

Got to say that this one is on a yellow card for me.

I'll give it until the end March.

[farnesbarnes] 04/2/2021 08:32

Unthinking sheep.
Something fishy.
Smelling a rat.
And now a BOD of snakes.
Just need rain for 40 days and 40 nights now.

edit - plenty of less than salutary comments on Stocko today. They need to have a PR rethink.

[effortless cool] 02/2/2021 15:35

Good to see that VLG have signed up with InvestorMeetCompany. Hopefully, we will get the opportunity to put questions direct to management before too long.

[simon gordon] 02/2/2021 12:01

The Cenkos note from November maps out why Slater went from 5% to 15%. It's all quite clear and if management deliver on this then there is 50% to 100% upside over the next 12 to 18 months.

In a Covid variant world this is an excellent risk reward play.

[thedudie] 02/2/2021 11:52

I like the growth story so bought some more this morning...
And if an acquisition (or more than one) was to happen that took EBITDA to £10m -£12m or above then it looks very cheap to me.

[speedsgh] 02/2/2021 11:10

Impressive list. Reassuring. If we have all got this wrong, then there will be a lot of very successful investment managers with egg on their face too. Unlikely to happen imo.

[rivaldo] 02/2/2021 10:45

The updated major shareholder list post-placing is worth a look - this represents almost 63% of the shares in issue.

Quite a stellar list of holders, with Slater and BlackRock at the top:

Shareholder Number of shares held % issued share capital
Slater Investments 19,121,431 15.2%
BlackRock 10,287,191 8.2%
BGF Investment Management Limited 9,581,824 7.6%
Hargreaves Lansdown 7,470,972 5.9%
Directors 6,440,937 5.1%
River & Mercantile Asset Management LLP 6,437,200 5.1%
JO Hambro Capital Management 5,555,000 4.4%
Close Brother Asset Management 5,538,410 4.4%
Stonehage Fleming 5,093,438 4.0%
Chelverton Asset Management 3,778,000 3.0%

[frankwhite] 02/2/2021 09:43

Shall wait for the acquisition announcements, until then I won't be investing here.

[shanklin] 02/2/2021 08:46

Thank you rivaldo

GLAH of which I am no longer one.

[qs99] 02/2/2021 08:09

Thanks Riv, let's see if demand can get this back into the 90s at least AND the board can start delivering some +ve news flow to justify higher....GLA

[rivaldo] 01/2/2021 23:01

Here's Cenkos' investment update today for the record:

"Venture Life Group has announced a trading update for the year to December 2020.

The company expects revenues to be up 49% to £30.1m and adjusted EBITDA to be at least £6m, up over 100% YoY and indicating a margin of c20% over 500bps up on FY19A’s c15%. These results highlight an exceptional year for the company despite the pandemic. With a balance sheet strengthened to enable targeted acquisitions to build on the double-digit revenue growth we forecast for FY21E, we believe the year ahead should be another exceptional year for the company. We reiterate our Buy recommendation.

FY20E – Venture Life expects to report FY20E revenues of £30.1m, up 49% YoY and in-line with our pre-update £30.3m forecast. Adjusted EBITDA is expected to be at least £6m, in line with our forecast £6.0m, which we have kept unchanged.

Revenues – The company states that there were no further shipments of products to China in H2/20E, but that shipments will resume in H1/21E, as such we believe that a certain amount of revenues may have been deferred from FY20E into FY21E. This being the case, it would also indicate stronger than expected revenue generation from product sales outside of China and from third-party brand manufacturing.

Acquisitions – Acquired at the start of 2020, Venture Life notes that PharmaSource revenues grew through the year despite the pandemic and they have achieved a number of synergies to date. We expect that following the recent fund raise, announced in Nov-20, further acquisitions will be completed through 2021E.

Forecasts – We have updated our forecasts in-line with the FY20E trading update and given the minimal adjustments have kept our FY21E forecasts unchanged. For FY20E we lowered revenues by £0.2m and offset this at the gross profit line, given the larger proportion of higher margin Venture Brand revenues expected in FY20E.

Investment thesis – Venture Life has delivered a strong growth year despite the COVID-19 pandemic. Including the PharmaSource acquisition completed in January, Venture Life has delivered 49% revenue growth and an adjusted EBITDA margin up c500bps on FY19A. With further acquisitions set to add to our forecast c11% organic revenue growth for FY21E, we expect another strong year ahead and see the current valuation offering an attractive opportunity. We reiterate our Buy recommendation."

[bountyhunter] 01/2/2021 18:59

If you take off the cash of £35.5m from the market cap of £111m then divide by earnings for 2020 of £6m, you get a PE ratio of ~12.5 which is excellent for an AIM small cap company. Let's hope they use that £35.5m wisely to make an earnings enhancing acquisition with savings through synergies then we should all be happy. Meanwhile I'm using their Dentyl mouthwash every evening to kill off any of those Covid nasties that may have taken up residence throughout the day! 😉

[sharw] 01/2/2021 17:35

"expected to be not less than £6m" - yes, that is what has put people's backs up - Cenkos forecast £6m back in November so 'not less than' that amount does not warrant the headline at the top picked out from everything else in colour (except the ADVFN version) proclaiming "Full year profit ahead of market expectations". On another board a poster complains of VLG's "rampy" RNSs.

[farnesbarnes] 01/2/2021 17:25

QS, is there an echo in here?

I remember saying I smelt a rat about 6 weeks ago and was lambasted for it.

[energeticbacker] 01/2/2021 16:59

Featured in today's Investor's Champion Bonkers Bargains update –

Adjusted EBITDA (before the deduction of exceptional items and share based payments - expect plenty of these!) for the year ending 31 December is expected to be not less than £6m, more than double the 2019 adjusted EBITDA

[qs99] 01/2/2021 16:02

Last one for me, but isn't VLG one of Simon T's (IC) favourites? So hopefully will get an update from him, +ve I hope! DYOR

[qs99] 01/2/2021 16:00

Hopefully that seller now gone