Venture Life Share Discussion Threads

[qs99] 07/12/2022 08:25

China gradually easing the Zero Covid rules, hopefully this should provide some uplift to VLG as probably assuming zero from China in 2023! DYOR

[qs99] 06/12/2022 08:03

Love BG's updates and interviews with management of various companies thanks mate! Informative and real world and often amusing. VLG and EQUALS two good ones this last week or so. KEep up the good work.

Look forward as a VLG holder to seeing new deals and China relaxing COVID restrictions feeding into top and bottom line growth....DYOR

[eagle eye] 05/12/2022 21:36

rivaldo and Brummy_git,
Thanks for informative posts.
No upticks on either posts.....VLG remains firmly under the radar.
Good forecast revenue growth and visibility, eps growing at a fair clip and margin trend improving.
Plenty to like here and a possible zulu stock in the making IMHO.

[qs99] 05/12/2022 09:31

Nice, thanks all for the update....

[brummy_git] 02/12/2022 11:28

Fabulous interview here with CEO Jerry Randall, who discusses Venture Life's synergistic £13m acquisition of HL Healthcare and trading update.

www.linkedin.com/posts/paul-hill-a5994116_video-venture-life-continues-to-go-from-activity-7004405605096448000-MERv?utm_source=share&utm_medium=member_desktop

[rivaldo] 02/12/2022 10:45

Nice positive turnaround this morning.

Singer Capital Markets have now raised their target price to 72p and say Buy.

There's always a strange differential between Cenkos and Singer's adjusted EPS forecasts, despite their forecasts for next year's revenues, adj. EBITDA and EV/EBITDA figures being almost exactly the same.

Cenkos forecast adjusted (fully diluted) EPS of 6.02p EPS next year, whereas Singer go for 4.1p EPS. Unfortunately I don't have the back-up for Singer's forecast so can't get an explanation.

Anyway, here's Singer's summary:

"Positive trading since the last update means VLG remains well on track to deliver expectations for the full year, and we continue to see potential risk to the upside given a strong order book.

The £13m acquisition of HL, a specialist in ear-nose-throat products, is complementary to the existing portfolio and highly accretive. We have upgraded Dec’23 EPS by 22%. Our target price increases 10% to 72p on the back of this, providing a compelling 170% TSR from current levels.

Trading update – risk potentially remains to the upside

Alongside today’s acquisition, VLG has issued a brief trading update. The board remains confident that the group is on track to deliver revenue and adjusted EBITDA in line with market expectations. Given the strength of the order book we continue to believe that the risk potentially lies to the upside.

It has also announced new 5-year distribution agreements for Gelclair in LATAM and Vietnam and for Balance Activ in Ireland, which provide support for outer year forecasts. We therefore make no changes to our existing profit forecasts for the base business.

Accretive acquisition – entry into ear-nose-throat niche

VLG has announced the acquisition of HL Healthcare (HL), a UK based, founder-owned, business with specialist products in the ear-nose-throat (ENT) market. HL owns 3 approved and registered ENT products, which specialise in unblocking and protecting ears and noses, and are sold directly to wholesalers and retailers in the UK and to licensing partners internationally. The business has an excellent growth track record, is highly profitable (EBITDA margin c37%) and offers significant
opportunity for future growth and synergy by leveraging VLG’s manufacturing/distribution channels.

The £13m consideration equates to <7x EV/EBITDA (year1) reducing to <5x post synergies (year 3).

Dec’23 EPS upgraded by 22% - with EBITDA margin strengthening to 23%

In the first full year (Dec’23), the acquisition is highly accretive. We have upgraded EBITDA by 20% (EBITDA margin +270bps to 23%) and EPS by 22%. We now expect 86% EPS growth next year on 23% revenue growth. Underlying forecasts for the base business are unchanged within this but, as noted above, we believe risk potentially lies to the upside. We have increased our Y/E ND forecast to £12m reflecting the cost of the acquisition as well as a slightly higher year end w/c position, which is due to the strength of the order book being carried forward into FY23 – good underpinning for next year’s forecasts. ND is expected to reduce to £9m next year, equating to 1x leverage which is comfortable.

Valuation offers substantial scope for outperformance

The shares trade on 12x P/E to Dec’22, now falling to 6.5x next year post-acquisition. This equates to 3.6x EV/EBITDA to Dec’23, potentially falling to 2-3x in Dec’24. The FCF yield next year is c18% after adjusting for the deferred HL acquisition consideration. These metrics do not adequately capture the strong EBITDA margin and growth profile, which the HL acquisition has enhanced. After increasing the target multiple by 0.5x to 8.5x, our target price increases 10% to 72p, offering a TSR of 170% while still leaving potential for further re-rating given peers typically trade on 10-20x. Buy."

[qs99] 01/12/2022 14:15

deanowls, see Brummy git's link above, and his LI profile, usually some cracking updates and details as to VLG and other stocks....DYOR

[thedudie] 01/12/2022 14:05

Looks like 50p - 60p would be more appropriate if the 2022 forecast is proved.

[stemis] 01/12/2022 13:40

Current share price (31.5p) values VTG at around 5.25 x 2022 ebitda and 4.3 x 2023 forecast.

[rivaldo] 01/12/2022 12:59

Deanowls, Cenkos now forecast adjusted EPS of 4.53p this year followed by 6.02p EPS next year.

[thedudie] 01/12/2022 11:18

Nice acquisition with headroom for growth on an undemanding multiple. What is not to like. I think once they demonstrate they are managing the numerous headwinds they are exposed to then the shares will re-rate higher.

[deanowls] 01/12/2022 11:14

They can bring that manufacturing in house, will benefit from the logistics to current markets also should a couple of hundred grand they should be able to eeek out of costs there.

Any updated forecasts out there?

[qs99] 01/12/2022 11:11

A nice squeeze coming on DYOR

[qs99] 01/12/2022 10:26

Nice comprehensive write up thanks BG

have tucked away a few more this am as just looks like VLG is on the up again after a tough period. Good M&A opportunities, let's hope they can continue to deliver meaningful organic growth as well and maybe even some growth in China!

DYOR
Cheers
QS99

[brummy_git] 01/12/2022 09:05

All the commentary & news here chaps

www.linkedin.com/posts/paul-hill-a5994116_vlg-vlg-vlg-activity-7004004124488785920-Tods?utm_source=share&utm_medium=member_desktop

[qs99] 01/12/2022 08:59

Looks like a cracking deal IMO well done VLG and new distribution partners and trading in-line, all round great RNS! DYOR

[rivaldo] 01/12/2022 07:30

Indeed it does - lots of good news today:

- confirmation that trading is in line
- new distribution agreements for Brazil, Vietnam and Ireland. The Brazil agreement is with the "number one pharmaceutical company in the non-retail market in Brazil", so could be huge
- an excellent-looking acquisition from VLG's own resources - so no dilution. £10m plus £3m based on performance brings in £1.4m historic PAT with further growth since then, which is pretty good value

[pngasef] 01/12/2022 07:29

Lots in that RNS!!

[wooster4] 01/12/2022 07:08

Spot on sev. Considering the price action over the past few months (expecting downgrades) that looks pretty decent

[sev22] 30/11/2022 09:04

VLG released a Trading Update on the 1st December last year. I wonder if we will get some positive news tomorrow morning.

[qs99] 29/11/2022 09:19

Maybe sentiment turning down due to evens in China?

[qs99] 16/11/2022 13:28

And more buys coming in at full Offer. Having bought a few more this week, the size available to buy when I was doing it was super small, DYOR, but won't take much to really squeeze this higher....

[qs99] 16/11/2022 10:55

continued moves North....lovely job

[qs99] 15/11/2022 17:15

good point

[paleje] 15/11/2022 16:03

China unlocking covid restrictions could be helping.