Venture Life Share Discussion Threads

[sharw] 03/4/2021 12:08

The Q&A is now available to view on the IMC website.

[tole] 02/4/2021 20:01

https://www.fool.co.uk/investing/2021/03/31/2-small-cap-uk-shares-that-could-outperform-the-ftse-100/

[sharw] 30/3/2021 10:43

The recording of the presentation is now available on IMC. The Q&A is not yet there. Basically they ran out of time for Q&A but it sounded as if there were several on acquisitions.

[shanklin] 29/3/2021 16:48

Thank you EC

[effortless cool] 29/3/2021 16:17

No, they didn't cover that and it was not one of the pre-submitted questions (there was no time to cover questions submitted during the presentation, although we were promised written answers later).

[shanklin] 29/3/2021 15:26

Hi EC

Was there any commentary please on why the directors sold so many shares at the time of the placing? Presumably they did not say it was because they thought the share price was far too high :-)

[effortless cool] 29/3/2021 14:47

It was an interesting presentation, giving insights into the business beyond those that can be gleaned from the published results.

On acquisitions, they didn't really explain why there has been such a delay from the fundraising to actually completing a new acquisition. However, it was very clear that 'buy and build' is their core business strategy, and more acquisitions will certainly come. Related to this, there was an useful slide showing the spare manufacturing capacity they have at present and how they can double current capacity with further investment of £10m.

[thedudie] 29/3/2021 14:24

I thought it looked good.
A £50 million debt facility is being prepared and will be completed soon. They suggested a 50% debt:50% cash approach to M&A. Looks to me that they may be eyeing up some bigger targets. Maybe that is why M&A appears to be taking longer than expected. They have many opportunities they are screening.

Production facilities have multiple routes to expansion. Last years expansion gives them almost 50% free capacity on last years volumes.

[qs99] 29/3/2021 14:12

Anyone listen in? Views please? Stuck on zoom calls!

Thanks
QS99

[simon gordon] 29/3/2021 12:31

Just a reminder that the Investor Meet video call starts at 1pm with the CEO, CFO and CCO:

[rivaldo] 29/3/2021 12:28

Nice start to the week.

QS99, Cenkos don't have a target price. However, they see an EV/EBITDA ration of only 9.3 for the current year, which is above average/healthy, along with the ex-cash P/E of only 12.9.

[qs99] 26/3/2021 08:27

Thanks Riv.....does it give a TP? No worries if not. I'm more EV/EBITDA ratio value hunter really.....but it is a strong note IMO and thanks for sharing.

Good they have bolstered the M&A team. Mind you in my day at a PLC we managed to do plenty in one year with a minimal team (me!)....so VLG are behind the curve on timing IMO still....

DYOR

[rivaldo] 25/3/2021 23:12

Here's Cenkos' summary today for the record - encouraging to see their confidence that an acquisition will be completed in the "near-term":

"Venture Life Group Plc
Outstanding year

Venture Life Group has delivered an outstanding year with revenues up c50% and adjusted EBITDA up over 100%. Revenue growth was delivered both organically and via M&A, and across both the Venture Life brands and the Customer brands divisions. Revenue growth was matched by margin expansion, with gross margin up over 300bps and adjusted EBITDA margin above 20% for the first time. The group closed 2020 with a strong balance sheet able to support M&A. We believe Venture Life is entering 2021 in an exceptionally strong position with numerous organic growth opportunities and the financial capacity to complete significant acquisitions through the year. We reiterate our Buy recommendation.

Venture Life brands– Venture Life brands revenues grew over 120% in 2020A, supported by both organic and M&A growth. Significantly, Dentyl revenues were up 80% and the company has resumed shipments of this product to its Chinese partner. PharmaSource contributed £2.8m of revenues and the new brand DISINPLUS contributed £3.6m.

Customer brands– Revenues from the manufacture of customer brands were also up 12% in the year, supported by new and existing customers. Through the year, capacity at the manufacturing site was expanded providing scope for future growth in support of the group’s organic and acquisition strategies.

M&A – Whilst the Group has not yet completed on any of the three potential acquisition targets discussed with the recent equity raise, we remain confident that at least one of these deals will be completed in the near-term. The raise has also enabled Venture Life to pursue other promising M&A assets and the company has added resources to bolster is M&A capabilities and increase pipeline development.

Profitability– We believe 2020 demonstrated the significant operational leverage capacity within the group. Gross margin was up +300bps supported by favourable mix, manufacturing efficiency and higher margin acquired products. The adjusted EBITDA margin moved above 20% for the first time.

Investment thesis – We believe Venture Life is in an exceptionally strong position at the start of 2021. We see organic growth opportunities in both divisions while the balance sheet strength and available debt financing is expected to support management’s M&A ambitions through the year. We remain Buyers of the stock."

[davr0s] 25/3/2021 20:41

You can't resist but I'll leave it there

[effortless cool] 25/3/2021 20:39

"Seems some peeps can’t take banter on this board when it goes the other way. Anyhow I’ll leave it there and wish holders well".

You just need to look in the mirror to see the truth in that.

Anyway, all the best to you, too.

[davr0s] 25/3/2021 20:34

Moved on today given short term strength. Seems some peeps can't take banter on this board when it goes the other way. Anyhow I'll leave it there and wish holders well. I might come back but feel it's a bit rich to raise all that cash with all those acquisition targets and naff all happened many months after

[lammylover] 25/3/2021 12:07

Looks like we may have to wait for news of acquisitions, but that's fine.
I'd rather the Board spent longer doing their due diligence and getting a complementary business at the right price, rather than rushing to use the fund raise monies.

This is a strong company in growth sector which should accelerate its performance as CV19 lockdown lifts and customers return to the high street.

I'd expect Simon Thompson in IC to continue to rate a Buy, based on LY results.
Share price will probably bounce over 90p as soon as he lists it on line / via Investors Chronicle magazine.

Happy to hold for further gains.

Rich

[lammylover] 25/3/2021 12:06

Looks like we may have to wait for news of acquisitions, but that's fine.
I'd rather the Board spent longer doing their due diligence and getting a complementary business at the right price, rather than rushing to use the fund raise monies.

This is a strong company in growth sector which should accelerate its performance as CV19 lockdown lifts and customers return to the high street.

I'd expect Simon Thompson in IC to continue to rate a Buy, based on LY results.
Share price will probably bounce over 90p as soon as he lists it on line / via Investors Chronicle magazine.

Happy to hold for further gains.

Rich

[qs99] 25/3/2021 11:57

market has at least taken it in its stride IMO, so let's hope Simon T of IC picks up and is +ve, but more importantly than mag tips, is the M&A and update on trading next....DYOR

[rivaldo] 25/3/2021 11:01

...which means the current year cash-adjusted P/E is only around 12.9 at 81.5p per Cenkos.

This is affected by the increased number of shares this year following the placing. As soon as any of the three mooted acquisitions are made that P/E of 12.9 will likely fall dramatically.

It seems to me that after all this time post-fundraising, the likelihood of acquisitions must now be closer than ever, so now is the time to be holding strong or adding. Especially following excellent results with a strong outlook.

[eagle eye] 25/3/2021 10:36

This has been the big laggard in my portfolio over the past six months.
Cenkos has forecast eps of 4p for current year which puts the PER x 20.
Cash position of £41.2m is equivalent to 32.7 pence per share.
Still no news on the long mooted acquisitions. The chart is uninspiring and I wouldn't be a buyer today.
On that basis, I've used today's early morning volume to exit completely.
Best wishes to all long term holders.

[qs99] 25/3/2021 09:36

yes i'll hold for the elusive "deal" which as they identified 3 at least on Placing should be "deals" to be clear. no sign of any Cardiff COVID news on mouthwash?

[thedudie] 25/3/2021 09:01

Cenkos note says
"we remain confident that at least one of these deals will be completed in the near-term"

Results mostly to expectation I think - growth appears to have resumed order book not surprisingly greater than same time last year etc. Business appears to have traction - lift more of the covid restrictions and it should outperform. Add a decent acquisition or two ....

[melody9999] 25/3/2021 08:53

The market has priced in the lack of acquisition news since the funding - IMV excessively. But that provides a buying opportunity AFAIAC.

A deal is never done until is done, and assuming you trust the VLG management then IMV you cannot blame them for that - rather kudos for not rushing into a poor deal

In the meantime, and in any case, we have a business that is growing stongly organically ......with kickers likely to come from acquisitions.

Whats not to like? Added this am

[rivaldo] 25/3/2021 08:44

Cenkos this morning highlight a cash-adjusted P/E of just 11.6 for 2020.

That's based on the 4.5p historic adjusted EPS and the £42.1m cash against a now £103m m/cap, as I said earlier.

That P/E is 12.9 for this year, but will certainly reduce even further after any acquisitions.