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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Venture Life Group Plc | LSE:VLG | London | Ordinary Share | GB00BFPM8908 | ORD 0.3P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 39.25 | 38.50 | 40.00 | 39.25 | 39.25 | 39.25 | 1,630 | 08:00:27 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Misc Retail Stores, Nec | 43.98M | 520k | 0.0041 | 95.73 | 49.39M |
From Apr 2019 to Apr 2024
TIDMVLG
RNS Number : 5603W
Venture Life Group PLC
18 April 2019
18(th) April 2019
VENTURE LIFE GROUP PLC
("Venture Life" or the "Group")
Final Results
Record year of growth and profitability
Venture Life (AIM: VLG), a leader in developing, manufacturing and commercialising products for the international self-care market, announces its audited results for the year ended 31 December 2018.
Financial Highlights
-- Revenues up 17% to GBP18.8 million (2017: GBP16.1 million) -- Brands segment increased revenues by 50% to GBP6.6 million (2017: GBP4.5 million) -- Gross profit increased 12% to GBP7.3 million (2017: GBP6.5 million) -- Gross margin 39% (2017: 40%) -- Adjusted EBITDA increased by 42% to GBP2.7* million (2017: GBP1.9 million) -- Profit after tax of GBP0.4 million* (2017: loss after tax GBP0.4 million) -- Adjusted earnings per share of 2.06 pence** (2017: 0.66 pence) -- Year-end cash balance of GBP9.6 million (2017: GBP1.4 million) -- Year-end net cash position of GBP5.8 million (2017: Net debt of GBP6.3 million)
* Before exceptional items
** Adjusted for share based payments, amortisation and exceptional items
Commercial Highlights
-- Strong underlying organic growth driven by new product launches and partnership agreements
-- Oversubscribed Placing in July 2018, raising GBP18.75 million, before expenses, at 40p per share
-- Acquisition of Dentyl oral care brand for GBP4.2 million, in line with strategy of leveraging Group operating capacity to generate enhanced revenue and profitability
-- Signed 16 international agreements with the addition of 11 new partners -- Growing international footprint with 5 new product launches
-- Manufacturing capacity now increased through plant reorganisation, 2018 production represents only 58% of this increased capacity
Jerry Randall, CEO of Venture Life, commented: "I am delighted to report on a transformational year for Venture Life, in which we achieved double digit growth in both revenues and profits, as well as completing our largest equity raise to date. The equity raise in July last year allowed us to acquire the Dentyl brand, in line with our acquisition strategy, and moved us from a net debt to a net cash positon, providing additional cash for further brand acquisitions.
"Our core focus remains on expanding the business organically and acquisitively. Despite the challenging general market conditions, the Board is confident of achieving another year of substantial growth in 2019 and looks forward to updating the market in due course."
For further information, please contact:
Hot Features
Premium
Venture Life Group PLC +44 (0) 1344 578004
Jerry Randall, Chief Executive Officer
+44 (0) 20 7397
Cenkos Securities Ltd (Nomad and Broker) 8900
Mark Connelly / Stephen Keys / Cameron MacRitchie
(Corporate Finance)
Russell Kerr / Michael Johnson (Sales)
Alma PR venturelife@almapr.co.uk or + 44 (0)
203 405 0208
Helena Bogle / Rebecca Sanders-Hewett
/ Hilary Buchanan / Jessica
Joynson
About Venture Life (www.venture-life.com)
Venture Life is an international consumer self-care company focused on developing, manufacturing and commercialising products for the global self-care market. With operations in both the UK and Italy, the Group's product portfolio includes some key products such as the UltraDEX and Dentyl oral care product ranges, food supplements for maintaining brain function, medical devices for women's intimate healthcare and proctology and dermo-cosmetics for addressing the signs of ageing.
The products, which are typically recommended by pharmacists or healthcare practitioners, are available primarily through pharmacies and grocery multiples. In the UK these are supplied direct by the company, outside of the UK they are supplied by the Group's international distribution partners.
Through its Development & Manufacturing business in Italy, Biokosmes, the Group also provides development and manufacturing services to companies in the medical devices and cosmetic sectors.
Chair's Statement
During the year, we have delivered on a number of strategic priorities in line with our clear strategy of leveraging our significant operating capacity to grow revenues and profitability.
The Group delivered a record financial performance, with revenues of GBP18.8 million, an increase of 17% over 2017, and our first profit after tax of GBP0.4 million (before exceptional items). This marks a significant milestone in the journey of the business towards sustainable profitability and cash generation, achieved against the backdrop of a challenging consumer environment in the UK. The truly international nature of our business gives the Group robustness against local market dynamics and this has again been demonstrated with our 2018 results.
In July 2018, we undertook the largest equity raise in the Group's history, raising GBP18.75 million, before expenses, via a significantly oversubscribed Placing. The funds were used to make an exciting new brand acquisition, repay a significant proportion of the debt on our balance sheet and provide additional cash for further add-on brand acquisitions in 2019 and beyond. We would like to welcome the 18 new institutional investors onto our shareholder register and thank them, together with our existing shareholders, for their support.
As well as continuing to deliver underlying organic growth, the Group successfully executed against its acquisitive growth strategy, with the acquisition of the Dentyl brand for GBP4.2 million in August 2018. This is in line with our strategy of identifying unloved brands that we can rapidly integrate into the Venture Life business platform to generate growth in revenue and profitability. Dentyl, a unique dual-action mouthwash for removing plaque, has been sold in the UK market for over 22 years and is familiar to many UK consumers. With limited exposure to international markets to date, this brand is well suited for global expansion, which will allow us to maximise its value.
During the year, we repaid GBP3.7 million of convertible debt in our balance sheet and we settled GBP0.4 million of deferred consideration associated with the UltraDEX acquisition that completed in 2016. These instruments had a combined annual interest cost of GBP0.28 million, which is now removed from our profit and loss account.
The remainder of the net proceeds of the equity raise added GBP9.2 million of cash to our balance sheet. This has put us in a strong net cash position of GBP5.8 million (excluding finance leases) at the year end. As a result, the Group has the flexibility and resources needed to pursue its acquisitive growth strategy and the Board continues to assess acquisition opportunities.
The Group's objective is to continue to grow revenues both organically and through acquisition, utilising the Group's significant operating leverage to increase profit. The next two to three years are likely to present opportunities for the fleet-of-foot acquisitive businesses that possess the operating structures capable of absorbing and leveraging brand assets. Larger companies are often rationalising their brand portfolios to focus on bigger assets and this may release suitable assets for sale to companies such as ours. Venture Life is well placed to use its operational capabilities to integrate new brands into our business and now with a deeper, wider shareholder base supportive of our acquisitive growth strategy, we believe we have a strong proposition on offer to take advantage of these opportunities.
During the year one of our non-executive directors, John Sylvester, left the Board. We would like to thank John for his support and wise counsel to us all during his time with us since the Group's IPO in March 2014.
We were delighted to welcome Carl Dempsey to the Board in September 2018. Until recently, Carl was Worldwide Vice President Global Customer Management at Johnson & Johnson responsible for global sales of US$3.6 billion across 22 countries. This was the culmination of a 29-year career with Johnson & Johnson, which also included leading the successful integration of Pfizer Consumer Healthcare, including the Listerine brand. Carl has already made a strong positive contribution to our Board and his experience and expertise will be invaluable to us as we continue to grow.
Following the departure of Adrian Crockett earlier this year, we are pleased to confirm that we have identified a suitable replacement and expect to announce the appointment of a new Chief Financial Officer in the near future.
We expect 2019 to be another year of growth and development for the Group. I would like to thank our incredible staff in both the UK and Italy for their consistent hard work, determination and ambition, which has resulted in these record results.
Dr Lynn Drummond
Non-Executive Chair
18(th) April 2019
Chief Executive's Statement
Introduction
The Group's performance in 2018 has been a testament to the hard work, expertise, enthusiasm and commitment of the whole team at Venture Life. Despite volatile market conditions, we have delivered another year of double-digit growth in both revenues and profits, driven by our organic and acquisitive growth strategy. We achieved our maiden profit after tax of GBP0.4 million before exceptional items (2017: loss after tax GBP0.4 million). This is a key milestone for the Group against our core focus of building a sustainably profitable, cash-generative business.
Underneath the headline revenue growth of 17%, the Group delivered organic growth from its existing portfolio of 8%, with 9% added through the acquisition of the Dentyl brand. We expect that the Dentyl brand will provide additional revenue and cash flow from both the UK and its two overseas markets, China and South Africa.
We achieved a gross margin percentage for the year of 39% (2017: 40%). In the second half, our gross margin percentage rose to 41%, from 36% in the first half, as the higher revenues and throughput at our factory demonstrated the impact of our operating leverage as we grow revenues. First-half gross margin, which was impacted by larger than expected Lubatti orders from our distribution partner in China, was at the lower end of our expectations.
The organic growth of the business was accomplished through our existing customers developing their in-market sales, utilising our expertise in new product development and manufacturing to enhance both their sales and our revenues. It was also attained by expanding those customer relationships through the addition of new territories and products from within our portfolio. Our international teams across the business have been very active in this development during 2018, with 16 new distribution agreements completed.
Growth strategy
Our growth strategy is based on a continuing combination of organic and acquisitive growth. We are seeking to increase our revenues through our existing operating structure, delivering higher rates of marginal profit and cash flow to our business.
Organic revenue growth is delivered through growing the revenues of our existing portfolio of products. Outside of the UK, this involves deepening and broadening relationships with existing international partners in existing markets and then looking to appoint new partners in new markets. In the UK we have direct relationships with key pharmacy chains and grocery multiples, where we develop joint business plans on an annual basis. This involves a partnership from both sides, to expand the presence of our brands, including marketing strategies and innovation through new product development.
Our acquisitive growth strategy is principally focused on acquiring unloved, profitable, cash-generative brands that we can integrate into our operating structure effectively and efficiently. We then seek to grow those brand revenues through rapid geographical expansion and new product development, while also improving profitability by utilising our own operating capabilities.
Our acquisition strategy, as demonstrated by the acquisition of the Dentyl business, should result in earnings enhancement and increased cash generation for the Group going forward.
We expect that further bolt-on brand acquisitions, of similar size to UltraDEX and Dentyl, would be financed utilising existing cash resources, supplemented as appropriate with modest debt finance. We have a number of such opportunities under review and hope to update shareholders about these during 2019.
Operating review
Venture Life brands
UltraDEX
Revenues for the year for UltraDEX, our fresh breath oral care brand, were GBP3.3 million across all markets, compared to GBP3.4 million in 2017. Revenue from the UK and Ireland was GBP2.7 million (2017: GBP2.8 million), down slightly against the prior year. 2017 saw the first deliveries of UltraDEX in many of the new international territories. As is common with all our products, first orders are generally larger than the subsequent follow-on orders as they contain an element of channel stocking as well as expected sell-out. Subsequent orders are to only cover sell-out. Consequently, it is not uncommon to see lower repeat revenues in the second year of a new international market.
As reported at the half year, UltraDEX faced some headwinds in the UK market - --our biggest customer went through a process of destocking throughout the first half of 2018 due to the closure of a warehouse. Competitor activity intensified impacting the category average retail price. Despite the substantial decrease in retail price and increase in consumer marketing from our main competitor, UltraDEX remained relatively unaffected by this, which is an indication of the underlying strength of the brand. We will continue to monitor this.
Internationally, we have seen the continued progress of the UltraDEX brand, which was partnered in 20 countries as at the end of 2018, including the UK and Ireland (2017: 12 countries). Most recently, we have seen the product partnered in China, Macau, Taiwan and Hong Kong with the partner we inherited through the Dentyl acquisition, who has marketed Dentyl in China for the last 18 months. They will launch the product in H1 2019 and will be presenting both Dentyl and UltraDEX at Asia's largest beauty trade show, China Beauty Expo, in May 2019. Furthermore, we have seen new agreements in Austria, France, Spain, Portugal, Belgium (the latter two in mass market only), Malta, Ireland, UAE and Iraq.
Dentyl
Dentyl is a unique dual action mouthwash for the effective removal of plaque within the oral cavity. The product has been on the market for over 22 years and is well recognised in the UK.
The Dentyl brand was acquired in August 2018. In addition to the mouthwash range, we also acquired the UK and Ireland's rights to a novel fresh breath mint (Dentyl BB Mints), which had been launched by the vendor in a number of Tesco stores from May 2018.
Dentyl contributed GBP1.6 million of revenue to the Group for the approximate five months from the date of acquisition to the year end. Of this, GBP0.8 million was sold in the UK. Internationally, there were only two active partners at the time of the brand's acquisition, one in South Africa and one in China. Of the international reported revenues of GBP0.8 million in 2018 for the Group, less than 5% came from the South African partner. Revenues for the brand for the full year of 2018, on a proforma basis, were GBP3.9 million, a 34% increase against 2017.
Prior to the acquisition of the Dentyl brand, there had been almost no marketing or advertising in the UK for the previous four years and, as a result, sales had fallen consistently over a number of years. We acquired the brand for GBP4.2 million which represented a multiple of 1.5 times 2017 revenue and 3.5 times 2017 profit before tax.
In the early months of ownership, there were some losses of smaller listings in the UK, the risk of which had been identified through our due diligence process. However, since acquisition, our team has obtained new listings in the UK for Dentyl mouthwash, including in Lloyds Pharmacy, Amazon and Ocado and new listings for the Dentyl BB Mints in Morrisons, WH Smith Travel, Amazon and Ocado.
Internationally, our business development team has begun to work with the brand and has already signed new long-term distribution partners in Ireland and Malta and, post period end, in Finland. There is good interest globally, with discussions ongoing with a number of potential distribution partners across different countries and we would expect to announce further progress as we move through 2019.
We continue to invest in product development, as well as formulating the existing range at our facility in Italy to ensure we maximise the profit opportunity for Dentyl.
Lubatti
Revenues for the Lubatti brand through our Chinese partner grew in 2018 to GBP0.8 million (2017: GBP0.5 million); a proportion of this was building stock to meet new promotional plans. Our China distribution partner ran a number of promotions through the year to generate growth in the brand and bring more customers into the brand. In November 2018, the brand reached its highest monthly sell-out to date in China of RMB 3.6 million (approximately GBP0.4 million). The Chinese market still presents some logistical challenges, which means the product has a longer than normal lead time for the distribution partner. We continue to work with them in order to to reduce this lead time.
Other brands
Revenues from our other Group brands continue to grow and totalled GBP0.9 million for the year (2017: GBP0.5 million). In 2018, we achieved the following new distributon partnership agreements across our global network: for Procto-eze Plus (medical device class IIa for haemorrhoids), we have new partners in Austria, Romania and Poland and for NeuroAge (food supplement for brain function in healthy brains), we have partnered with a new company in Greece. However, as is evident, our main focus was on partnering UltraDEX and Dentyl throughout 2018.
In total, 16 new distribution agreements were signed in 2018 and we gained 11 new distribution partners. During the year we saw five new product launches in the international markets by our existing distribution partners, which included Procto-eze in Austria and Romania, as well as UltraDEX in France and Italy.
Customer brands
Our Customer Brands business is where we develop and manufacture products for third parties, with a focus on those products where we have a specialism and can add value to the process. Revenues for our Customer Brands business, through Biokosmes Srl in Italy, were GBP12.1 million (excluding intercompany revenues), an increase of 5% over 2017. This growth has come from a number of customers who are expanding sales in their own markets.
In particular, this year we have seen strong progress from one of our key customers, Alliance Pharma plc ("Alliance"), with 2018 revenues ahead of 2017. As previously announced, Alliance agreed to extend its manufacturing contract with us. The current agreement expired in 2019, with a run-off period of three years thereafter. This has now been extended to 2026, with a three-year run-off period at the end if not further extended. This extension has secured these growing revenues for a further seven years over the previous arrangements. In addition, as also previously announced, Alliance has agreed to transfer the manufacture of its Atopiclair products to us, which will add another valuable revenue stream and production to our business in 2019.
Another of our key partners, Menarini Group, launched its Relife range of products in Italy in 2018, which includes 21 products developed and manufactured for them at our Biokosmes facility. This launch has gone well and contributed to the revenue growth in 2018. We are expecting these products to be launched by our partner into additional markets in 2019 and beyond.
We are undertaking this process with a number of other customers, generating meaningful future revenue streams for this part of our business. Also during 2018 we have undertaken a significant amount of work for customers to adapt and modify products for the changes to the medical device regulations in Europe that become effective in May 2020. This work will also continue through 2019 but we expect will deliver significant revenues to our business in the future.
Work continues on the clinical studies for NeuroAge and Myco Clear, which are expected to conclude in late 2019 or early in 2020. Both products are registered and selling in some markets, but we have undertaken further studies to support and enhance the marketing of these products.
Summary
We are very pleased with the continued development of the Group in 2018. As well as achieving our maiden profit after tax, the equity raise in July 2018 was another major milestone for the business, which brought three key benefits: the Dentyl acquisition, reduced debt levels and a significantly strengthened balance sheet which can be utilised for further bolt-on acquisitions.
Through the combined strategy of both organic and acquisitive profitable growth, we aim to significantly increase Group revenue, profits and cash generation over the coming years. The current market environment is challenging for businesses generally, but we believe we have a solid and diverse business, with many strengths and opportunities. We continue to seek, assess and review suitable acquisition opportunities and, subject to meeting our strict criteria, we hope to bring you news of more acquisitions in due course.
We have undertaken Brexit planning, in order to mitigate against associated risks and remain well prepared and alert to possible disruptions as a result of a no deal Brexit. Some of the products we sell into the UK are manufactured at our plant in Italy and we have ensured there is additional stock in the UK in case there are congestion issues with products moving into the UK. We have also liaised with our UK manufacturers to make sure they are able to continue supply in the short term.
Beyond these short-term measures, the Group is well placed with backup suppliers in the UK if importing our products becomes prohibitively expensive. In the longer term, with the major part of the Group's operations based in Italy and distributing to multiple countries, we believe that the operational impact of Brexit will be limited. Fluctuations in the value of sterling will continue to affect how the Group's euro denominated revenues and costs are reported in the UK; however, as the Group has natural hedging, the impact on the profitability of these currency fluctuations is not expected to be significant.
We would like to thank all of our shareholders for their important and valued support in 2018, and we look forward to the future growth of our business with confidence.
Jerry Randall
Chief Executive Officer
18(th) April 2019
Financial Review
2018 delivered on the dual strategy of organic and acquired growth. Revenues for the year of GBP18.8 million were up 17% from 2017. The Group delivered again on its profitability progression, by driving greater revenues through its structure; after achieving a first adjusted EBITDA profit in 2016, and a first profit before tax in 2017, the Group has now achieved its first profit after tax of GBP0.4 million in 2018 (before exceptional items).
Statement of Comprehensive Income
The Group reported 2018 revenues of GBP18.8 million, an increase of 17% over the GBP16.1 million reported in 2017. IFRS 15 and 16 were early adopted in the prior year. The increase includes the first five months of the Dentyl brand. The Brands segment, which includes the Dentyl brand, increased revenues by 50% to GBP6.6 million (2017: GBP4.5 million). Of the total Brands revenue in 2018, GBP2.7 million was generated by UltraDEX brand sales with UK and Ireland retailers and revenues from international UltraDEX partners in countries including France, Italy, as well as countries in Scandinavia, added a further GBP0.6 million. Our Development and Manufacturing business, where we develop and manufacture products on behalf of third parties to be sold under their brands, reported revenues (excluding intercompany sales) of GBP12.1 million, an increase of 5% over 2017.
The euro continued to strengthen against the pound in 2018 - the average exchange rate during 2018 was EUR:GBP 1.13 compared to EUR:GBP 1.15 during 2017. This has very slightly increased reported revenue and administrative costs where large elements of these are in euros. The overall impact of the changes in foreign currency rates had a limited effect on the reported profit after tax of the Group. The change in foreign exchange in the year gave a slightly higher revenue offset by slightly higher costs, and a foreign exchange charge resulting from the revaluation of the Group's euro denominated loans.
The gross margin for 2018 was 39% (2017: 40%). Gross margin in the second half was 41%, which resulted from higher revenues and factory throughput, demonstrating the effect of our operating leverage. We reported a gross margin of 36% in the first half, which was affected by significant lower margin sales from our Lubatti partner in China and lower overall sales than in H2. We also increased the operating capacity of the plant in H1 2018, which has slightly increased our cost base but which should deliver the benefits of increased capacity in the future.
Administrative costs (pre-exceptional items) remained relatively stable in 2018 at GBP6.2 million (2017: GBP6.0 million). This reflects the continued focus on cost control against a backdrop of increasing revenues. Exceptional costs of GBP172,000 (2017: GBPNil) relate to legal and professional fees incurred in the acquisition of the Dentyl business.
Operating profit was GBP1.2 million (2017: GBP0.6 million) (before exceptional items) with the profit before tax for the Group of GBP0.9 million (before exceptional items) (2017: GBP0.1 million). The Group reported its maiden profit after tax of GBP0.4 million (before exceptional items) (2017: loss of GBP0.4 million).
These translated into basic earnings per share of 0.42 pence (2017: loss per share of 1.00 pence), with the improvement in business performance generating enhanced shareholder value. Adjusted earnings per share (adjusted for exceptional items, share-based payments and amortisation of intangible assets) were 2.06 pence (2017: adjusted earnings per share 0.66 pence). The number of shares in issue as at 31 December 2018 was 83,712,106 (31 December 2017: 36,837,106).
Statement of Financial Position
Intangible assets increased significantly due to the acquisition of the Dentyl brand for GBP4.2 million, further capitalisation of development costs of GBP0.5 million and continuing investment in patents and trademarks of GBP0.2 million. Capitalised development costs are carried in the amount of GBP1.5 million and reflect the recent peak in workflow assisting our customers with formulation upgrades and changes pursuant to the forthcoming change in Medical Device regulations arising in 2020. Whilst consuming cash, this investment continues to be value-enhancing through strengthening relationships with our customer base.
Property, plant and equipment increased as a result of investment of GBP0.3 million in new equipment in the Customer Brands business. The net working capital balance at 31 December 2018 increased from the prior year end due to the increased activity in 2018 as well as the addition of the Dentyl brand business. Total fixed assets of GBP25.1 million as at 31 December 2018 were GBP3.9 million higher than as at 31 December 2017, largely as a result of the acquisition of the Dentyl business.
Cash and debt
Cash and cash equivalents at the year end totalled GBP9.6 million (2017: GBP1.4 million) and were GBP8.1 million higher than as at 30 June 2018. Net cash inflow during 2018 amounted to GBP8.2 million with the increase in cash balances accounted for as follows:
-- Operating cash flow before movements in working capital - inflow of GBP2.4 million -- Tax paid - outflow of GBP(0.6) million
-- Net movement in working capital, including build of working capital for the Dentyl business - outflow of
GBP(1.6) million
-- Investment in manufacturing facility - outflow of GBP(0.3) million -- Investment in intangible development assets - outflow of GBP(0.7) million -- Acquisition of Dentyl - outflow of GBP(4.2) million -- Net movement in interest-bearing borrowings - outflow of GBP(4.4) million -- Net proceeds from equity raise - inflow of GBP17.7 million
Net debt, excluding finance lease obligations, reduced from GBP6.3 million as at 31 December 2017 to a net cash position of GBP5.8 million as at 31 December 2018.
The Group is financed by a range of largely euro denominated interest-bearing debt of varying maturities, comprising of invoice financing and unsecured bank loans. As highlighted earlier and given our net cash position at the year end, we are comfortable with the level of debt in the business, which is being used to finance growth and investment. The Directors have prepared detailed forecasts looking beyond 12 months from the date of these financial statements and expect the Group to continue to operate profitably in the foreseeable future.
Giuseppe Gioffre
Group Financial Controller
18(th) April 2019
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2018
Company number 05651130
Year ended Year ended
31 December 31 December
2018 2017
Notes GBP'000 GBP'000
------------------------------------------------------ ----- ----------- -----------
Revenue 2 18,770 16,052
Cost of sales (11,482) (9,581)
------------------------------------------------------ ----- ----------- -----------
Gross profit 7,288 6,471
Administrative expenses
Operating expenses (5,534) (5,431)
Amortisation of intangible assets (625) (521)
------------------------------------------------------ ----- ----------- -----------
Total administrative expenses (6,159) (5,952)
Other income 94 62
------------------------------------------------------ ----- ----------- -----------
Operating profit before exceptional items 1,223 581
Exceptional costs 3 (172) -
------------------------------------------------------ ----- ----------- -----------
Operating profit 1,051 581
Finance income - -
Finance costs (341) (518)
------------------------------------------------------ ----- ----------- -----------
Profit before tax 710 63
Tax 4 (474) (430)
------------------------------------------------------ ----- ----------- -----------
Profit/(loss) for the year 236 (367)
Other comprehensive income which will not
be subsequently reclassified to the income
statement
Other comprehensive income which will be subsequently
reclassified to the income statement 18 121
------------------------------------------------------ ----- ----------- -----------
Total comprehensive profit / (loss) for the
year attributable to equity holders of the
parent 254 (246)
------------------------------------------------------ ----- ----------- -----------
All of the profit and the total comprehensive income for the year is attributable to equity holders of the parent.
Year ended Year ended
31 December 31 December
2018 2017
------------------------------------------ ----------- -----------
Profit/(loss) per share
Basic profit / (loss) per share (pence) 50.42 (1.00)
Diluted profit / (loss) per share (pence) 50.38 (1.00)
------------------------------------------ ----------- -----------
Adjusted profit per share (pence) 52.06 0.66
Adjusted diluted profit per share (pence) 51.83 0.66
------------------------------------------ ----------- -----------
Consolidated Statement of Financial Position
at 31 December 2018
Company number 05651130
At 31 December At 31 December
2018 2017
Note GBP'000 GBP'000
-------------------------------------------- ---- -------------- --------------
Assets
Non-current assets
Intangible assets 7 20,542 16,175
Property, plant and equipment 4,591 5,069
-------------------------------------------- ---- -------------- --------------
25,133 21,244
-------------------------------------------- ---- -------------- --------------
Current assets
Inventories 3,869 3,563
Trade and other receivables 7,020 5,141
Cash and cash equivalents 9,623 1,361
-------------------------------------------- ---- -------------- --------------
20,512 10,065
-------------------------------------------- ---- -------------- --------------
Total assets 45,645 31,309
-------------------------------------------- ---- -------------- --------------
Equity and liabilities
Capital and reserves
Share capital 8 251 111
Share premium account 8 30,824 13,289
Merger reserve 8 7,656 7,656
Convertible bond reserve - 109
Foreign currency translation reserve 252 234
Share-based payments reserve 609 497
Retained earnings (7,512) (7,711)
-------------------------------------------- ---- -------------- --------------
Total equity attributable to equity holders
of the parent 32,080 14,185
-------------------------------------------- ---- -------------- --------------
Liabilities
Current liabilities
Trade and other payables 4,868 4,404
Taxation - 29
Interest-bearing borrowings 9 1,911 1,509
Convertible bond - 171
Vendor loan notes - 71
-------------------------------------------- ---- -------------- --------------
6,779 6,184
-------------------------------------------- ---- -------------- --------------
Non-current liabilities
Interest-bearing borrowings 9 5,157 6,243
Convertible bond - 1,631
Vendor loan notes - 1,751
Statutory employment provision 1,062 909
Deferred tax liability 567 406
-------------------------------------------- ---- -------------- --------------
6,786 10,940
-------------------------------------------- ---- -------------- --------------
Total liabilities 13,565 17,124
-------------------------------------------- ---- -------------- --------------
Total equity and liabilities 45,645 31,309
-------------------------------------------- ---- -------------- --------------
Consolidated Statement of Changes in Equity
for the year ended 31 December 2018
Foreign
Share Convertible currency Share-based
Share premium Merger bond translation payments Retained Total
capital account reserve reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 'GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ------- -------- -------- ----------- ----------- ----------- -------- -------
Balance at 1 January
2017 111 13,289 7,656 109 113 409 (7,329) 14,358
Loss for the year - - - - - - (367) (367)
Foreign exchange
on translation - - - - 121 - - 121
-------------------------- ------- -------- -------- ----------- ----------- ----------- -------- -------
Total comprehensive
expense - - - - 121 - (367) (246)
-------------------------- ------- -------- -------- ----------- ----------- ----------- -------- -------
Share options charge - - - - - 88 - 88
Dividends - - - - - - (15) (15)
-------------------------- ------- -------- -------- ----------- ----------- ----------- -------- -------
Transactions with
shareholders - - - - - 88 (15) 73
------------------------- -------- -------- -------- ----------- ----------- ----------- -------- -------
Balance at 1 January
2018 111 13,289 7,656 109 234 497 (7,711) 14,185
Impact of adoption
of IFRS 9 on opening
balances - - - - - - (37) (37)
Balance at 1 January
2018 (adjusted) 111 13,289 7,656 109 234 497 (7,748) 14,148
Profit for the year - - - - - - 236 236
Foreign exchange on translation - - - - 18 - - 18 -------------------------- ------- -------- -------- ----------- ----------- ----------- -------- ------- Total comprehensive income - - - - 18 - 236 254 -------------------------- ------- -------- -------- ----------- ----------- ----------- -------- ------- Issue of share capital 140 17,535 - - - - - 17,675 -------------------------- ------- -------- -------- ----------- ----------- ----------- -------- ------- Repayment of convertible bond - - - (109) - - 14 (95) -------------------------- ------- -------- -------- ----------- ----------- ----------- -------- ------- Share options charge - - - - - 112 - 112 Dividends - - - - - - (14) (14) -------------------------- ------- -------- -------- ----------- ----------- ----------- -------- ------- Transactions with shareholders 140 17,535 - (109) - 112 (14) 17,678 -------------------------- ------- -------- -------- ----------- ----------- ----------- -------- ------- Balance at 31 December 2018 251 30,824 7,656 - 252 609 (7,512) 32,080 -------------------------- ------- -------- -------- ----------- ----------- ----------- -------- -------
During the year the convertible loan note was fully repaid. A settlement loss of GBP14,000 versus the fair value of the liability component and a settlement gain of GBP109,000 versus the fair value of the equity component were recognised in the financial result for the year within finance costs. The bond reserve of GBP109,000 was released in full with the sum of GBP14,000 being transferred into retained earnings.
IFRS 9 was adopted with effect from 1(st) January 2018. The impact of adoption on the opening position was to increase the bad debt provision at 1 January 2018 by GBP37,000 and accordingly reduce retained earnings by GBP37,000.
Consolidated Statement of Cash Flows
for the year ended 31 December 2018
Year ended Year ended
31 December 31 December
2018 2017
GBP'000 GBP'000
-------------------------------------------------------------- ----------- -----------------
Cash flow from operating activities
Profit before tax 710 63
Finance expense 341 518
-------------------------------------------------------------- ----------- -----------------
Operating profit 1,051 581
Adjustments for:
- Depreciation of property, plant and equipment 756 668
- Amortisation of intangible assets 625 521
- Finance cost (276) (285)
- Disposal of capitalised development cost 184 165
- Share-based payment expense 112 88
-------------------------------------------------------------- ----------- -----------------
Operating cash flow before movements in working capital 2,452 1,738
Tax paid (565) (694)
Increase in inventories (259) (322)
Increase in trade and other receivables (1,868) (392)
Increase/(decrease) in trade and other payables 478 72
-------------------------------------------------------------- ----------- -----------------
Net cash generated by operating activities 238 402
-------------------------------------------------------------- ----------- -----------------
Cash flow from investing activities:
Acquisition of Dentyl business - net cash payment (4,200) -
Purchases of property, plant and equipment (271) (285)
Expenditure in respect of intangible assets (744) (568)
Proceeds on disposal of tangible asset -
-------------------------------------------------------------- ----------- -----------------
Net cash used in investing activities (5,215) (853)
-------------------------------------------------------------- ----------- -----------------
Cash flow from financing activities:
Net proceeds from issuance of ordinary shares 17,675 -
Repaid convertible bond (1,900) -
Repaid vendor loan note (1,790) -
Repayment of deferred consideration (410) -
Drawdown of interest-bearing borrowings 200 267
- Leasing obligation repayments (previously in administration
costs) (528) (486)
Dividends paid (14) (15)
Net cash from financing activities 13,233 (234)
-------------------------------------------------------------- ----------- -----------------
Net increase / (decrease) in cash and cash equivalents 8,256 (685)
Net foreign exchange difference 6 48
Cash and cash equivalents at beginning of period 1,361 1,998
-------------------------------------------------------------- ----------- -----------------
Cash and cash equivalents at end of period 9,623 1,361
-------------------------------------------------------------- ----------- -----------------
Notes to the Consolidated Statements
for the year ended 31 December 2018
1. Basis of the announcement
The nancial information of the Group set out above does not constitute statutory accounts for the purposes of Section 435 of the Companies Act 2006. The nancial information for the year ended 31 December 2018 has been extracted from the Group's audited nancial statements which were approved by the Board of directors on 18(th) April 2019 and delivered to the Registrar of Companies for England and Wales following the Company's 2019 Annual General Meeting.
The nancial information for the year ended 31 December 2018 has been extracted from the Group's nancial statements for that period. The report of the auditor on the 2018 nancial statements was unquali ed, did not include any references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under Section 498(2) or Section 498(3) of the Companies Act 2006.
Whilst the nancial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards ('IFRSs') as adopted by the European Union, this announcement does not itself contain su cient information to comply with those IFRSs. This nancial information has been prepared in accordance with the accounting policies set out in the 2018 Report and Accounts and updated for new standards adopted in the current year.
Items included in the nancial information of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated nancial information is presented in UK sterling (GBP), which is the Group's presentational currency.
The Company is a public limited company incorporated and domiciled in England & Wales and whose shares are quoted on AIM, a market operated by The London Stock Exchange.
The principal activity of Venture Life Group plc and its subsidiaries is the development and commercialisation of healthcare products, including food supplements, medical devices and dermo-cosmetics for the ageing population, and the manufacture of a range of topical products for the healthcare and cosmetics
2.1 Segment revenue and results
The following is an analysis of the Group's revenue and results by reportable segment.
Development Consolidated
and
Brands Manufacturing Group
GBP'000 GBP'000 GBP'000
-------------------------------------- ------- ------------- -------------
Year ended 31 December 2018
Revenue
Sale of goods 6,627 14,476 21,103
Sale of services - 411 411
Intercompany sales elimination - (2,744) (2,744)
-------------------------------------- ------- ------------- -------------
Total external revenue 6,627 12,143 18,770
-------------------------------------- ------- ------------- -------------
Results
Operating profit before exceptional
items
and excluding central administrative
costs 404 2,333 2,737
-------------------------------------- ------- ------------- -------------
Year ended 31 December 2017 Revenue Sale of goods 4,502 13,491 17,993 Sale of services - 297 297 Intercompany sales elimination - (2,238) (2,238) -------------------------------------- ------- ------------- ------------- Total external revenue 4,502 11,550 16,052 -------------------------------------- ------- ------------- ------------- Results Operating profit before exceptional items and excluding central administrative costs 255 1,756 2,011 -------------------------------------- ------- ------------- -------------
All revenue of the Group is recognised at point in time as determined by IFRS15.
The reconciliation of segmental operating profit to the Group's profit before tax is as follows:
Year ended Year ended
31 December 31 December
2018 2017
GBP'000 GBP'000
-------------------------------------------------------- ------------ ------------
Operating profit before exceptional items and excluding
central administrative costs 2,737 2,011
Exceptional items (172) -
Central administrative costs (1,514) (1,430)
Finance costs (341) (518)
-------------------------------------------------------- ------------ ------------
Profit before tax 710 63
-------------------------------------------------------- ------------ ------------
One customer generated revenue of GBP4,170,000 which accounted for 10% or more of total revenue (2017: one customer generated revenue of GBP3,376,000 which accounted for 10% or more of total revenue).
2.2 Segmental assets and liabilities
At 31 December At 31 December
2018 2017
GBP'000 GBP'000
------------------------------- -------------- --------------
Assets
Brands 8,284 3,255
Development and Manufacturing 14,078 13,683
Group consolidated assets 23,283 14,371
------------------------------- -------------- --------------
Consolidated total assets 45,645 31,309
------------------------------- -------------- --------------
Liabilities
Brands 2,249 1,651
Development and Manufacturing 10,953 11,014
Group consolidated liabilities 363 4,459
------------------------------- -------------- --------------
Consolidated total liabilities 13,565 17,124
------------------------------- -------------- --------------
2.3 Other segmental information
Depreciation Additions
to
and non-current
amortisation assets
GBP'000 GBP'000
------------------------------ ------------- -----------
Year ended 31 December 2018
Brands 163 4,379
Development and Manufacturing 916 1,015
Central administration 301 -
------------------------------ ------------- -----------
1,380 5,394
------------------------------ ------------- -----------
Year ended 31 December 2017
Brands 123 362
Development and Manufacturing 735 4,485
Central administration 331 -
------------------------------ ------------- -----------
1,189 4,847
------------------------------ ------------- -----------
2.4 Geographical information
The Group's revenue from external customers by geographical location of customer is detailed below:
Year ended Year ended
31 December 31 December
2018 2017
GBP'000 GBP'000
------------------ ----------- -----------
Revenue
UK 7,667 5,538
Italy 4,279 4,936
Switzerland 3,388 3,791
Rest of Europe 1,421 857
Rest of the World 2,015 930
------------------ ----------- -----------
Total revenue 18,770 16,052
------------------ ----------- -----------
3. Exceptional costs
Year ended Year ended
31 December 31 December
2018 2017
GBP'000 GBP'000
------------------------------------------------------ ----------- -----------
Costs incurred in the acquisition of the Dentyl brand 172 -
------------------------------------------------------ ----------- -----------
Total exceptional costs 172 -
------------------------------------------------------ ----------- -----------
During the period the Group incurred legal and professional fees in relation to the Dentyl acquisition.
4. Income tax expense
Year ended Year ended
31 December 31 December
2018 2017
GBP'000 GBP'000
-------------------------------------------------- ----------- -----------
Current tax:
Current tax on profits for the year 531 528
Adjustments in respect of earlier years - -
-------------------------------------------------- ----------- -----------
Total current tax expense 531 528
-------------------------------------------------- ----------- -----------
Deferred tax:
Origination and reversal of temporary differences (57) (98)
-------------------------------------------------- ----------- -----------
Total deferred tax expense (57) (98)
-------------------------------------------------- ----------- -----------
Total income tax expense 474 430
-------------------------------------------------- ----------- -----------
Tax on the Group's profit/(loss) before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits and losses of the consolidated entities as follows:
Year ended Year ended
31 December 31 December
2018 2017
GBP'000 GBP'000
------------------------------------------------------ ----------- -----------
Profit/(loss) before tax 710 63
Profit/(loss) before taxation multiplied by the local
tax rate of 19% (2017: 19%) 135 (12)
(Income) / Expenses not deductible for tax purposes 70 159
Change in recognised deferred tax liability (57) (98)
Change in unrecognised deferred tax asset 257 255
Higher rate on foreign taxes 69 126
------------------------------------------------------ ----------- -----------
Income tax charge 474 430
------------------------------------------------------ ----------- -----------
Changes to the UK corporation tax rates were enacted as part of the Finance Bill 2015 on 18 November 2015. These included reductions to the main rate to reduce the rate to 19% from 1 April 2017 and to 18% from 1 April 2020. A subsequent change to reduce the UK corporation tax rate to 17% from 1 April 2020 was included within the Finance Bill 2016 which was enacted on 6 September 2016.
As at the reporting date, the Group has unused tax losses of GBP9,257,000 (2017: GBP8,610,000) available for offset against future profits generated in the UK. No deferred tax asset has been recognised in respect of these losses due to the uncertainty of its recoverability.
The tax charge of the group is driven by tax paid on the profits of Biokosmes, offset by the release of deferred tax liabilities generated on the acquisition of Biokosmes and Periproducts businesses. In 2018 the effective tax rate of Biokosmes was 22% (2017: 25%).
5. Earnings per share
A reconciliation of the weighted average number of ordinary shares used in the measures is given below:
Year ended Year ended
31 December 31 December
2018 2017
Number Number
---------------------------- ----------- -----------
For basic EPS calculation 55,715,531 36,837,106
---------------------------- ----------- -----------
For diluted EPS calculation 62,496,480 36,837,106
---------------------------- ----------- -----------
A reconciliation of the earnings used in the different measures is given below:
GBP'000 GBP'000
-------------------------------------- ------- -------
For basic and diluted EPS calculation 236 (367)
-------------------------------------- ------- -------
For adjusted EPS calculation(1) 1,145 242
-------------------------------------- ------- -------
1 Adjusted EPS is profit/(loss) after tax excluding amortisation, exceptional costs and share-based payments.
The resulting EPS measures are:
Pence Pence
--------------------------------- ----- ------
Basic EPS calculation 0.42 (1.00)
--------------------------------- ----- ------
Diluted EPS calculation 0.38 (1.00)
--------------------------------- ----- ------
Adjusted EPS calculation(1) 2.06 0.66
--------------------------------- ----- ------
Adjusted Diluted EPS calculation 1.83 0.66
--------------------------------- ----- ------
In respect of 2017, the loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purpose of calculating the diluted profit loss per ordinary share are identical to those used for basic profit loss per share. This is because the exercise of share options and conversion of the vendor loan notes would have the effect of reducing the loss per ordinary share and is therefore not dilutive under the terms of IAS 33.
6. Dividends
Amounts recognised as distributions to equity holders in the period:
Year ended Year ended
31 December 31 December
2018 2017
GBP'000 GBP'000
--------------- ----------- -----------
Final dividend 14 15
--------------- ----------- -----------
The Directors do not recommend the payment of a dividend (2017: 0.04 pence per share).
7. Intangible assets
Development Patents Other
and intangible
costs Brands trademarks Goodwill assets Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ------------ ------- ----------- -------- ----------- -------
Cost or valuation:
At 1 January 2017 1,874 - 834 13,133 2,541 18,382
Additions 479 - - - 89 568
Disposals (165) - - - - (165)
Foreign exchange 80 - - - - 80
-------------------- ------------ ------- ----------- -------- ----------- -------
At 1 January 2018 2,268 - 834 13,133 2,630 18,865
Additions 579 1,089 165 3,100 189 5,120
Disposals (148) - (3) - - (151)
Foreign exchange 13 - - - - 13
-------------------- ------------ ------- ----------- -------- ----------- -------
At 31 December 2018 2,712 1,089 996 16,233 2,819 23,847
-------------------- ------------ ------- ----------- -------- ----------- -------
Amortisation:
At 1 January 2017 591 - 331 - 1,188 2,110
Charge for the year 258 - 172 - 91 521
Foreign exchange 59 - - - - 59
-------------------- ------------ ------- ----------- -------- ----------- -------
At 1 January 2018 908 - 503 - 1,279 2,690
Charge for the year 319 - 162 - 144 625
Disposals - - (3) - - (3)
Foreign exchange (4) - - - - (4)
-------------------- ------------ ------- ----------- -------- ----------- -------
At 31 December 2018 1,223 - 662 - 1,423 3,308
-------------------- ------------ ------- ----------- -------- ----------- -------
Carrying amount:
At 31 December 2017 1,360 - 331 13,133 1,351 16,175
-------------------- ------------ ------- ----------- -------- ----------- -------
At 31 December 2018 1,489 1,089 334 16,233 1,396 20,542
-------------------- ------------ ------- ----------- -------- ----------- -------
All trademark, license and patent renewals are amortised over their estimated useful lives, which is between five and ten years.
All amortisation has been charged to administrative expenses in the Statement of Comprehensive Income.
Other intangible assets currently comprise customer relationships and product formulations acquired through the acquisition of Biokosmes Srl, Periproducts and Dentyl. These assets were recognised at their fair value at the date of acquisition and are being amortised over a periods of between five and ten years.
Assets with indefinite economic lives are tested for impairment at least annually or more frequently if there are indicators that amounts might be impaired. The impairment review involves determining the recoverable amount of the relevant cash-generating unit, which corresponds to the higher of the fair value less costs to sell or its value in use.
The key assumptions used in relation to the Biokosmes (Development and Manufacturing CGU) and Periproducts (part of the Brands CGU) impairment review are as follows:
-- The estimates of profit after tax for the three years to 31 December 2021 are based on management forecasts of the Biokosmes and Periproducts businesses, with subsequent years growth forecasted at 5% and 2% respectively. Management consider 5% and 2% conservative growth rates for the businesses, but reflective of the operating sectors of the businesses.
-- The Group has applied a discount rate to the future cash flows of Biokosmes for five years, with a terminal value reflecting future years, using a pre-tax average cost-of-capital of 18%. These assumptions generate a significant headroom over the assets of the business held at the balance sheet date.
These assumptions are subjective and provide key sources of estimation uncertainty, specifically in relation to growth assumptions, future cashflows and the determination of discount rates. The actual results may vary and accordingly may cause adjustments to the Group's valuation in future financial years. Sensitivity analysis has been performed on the impairment review and indicate sufficient headroom in the event of reasonably possible changes in key assumptions which are unlikely to result in an impairment for intangibles.
7A. Business Combinations
In August 2018 the Company completed the acquisition of the Dentyl brand from DDD Limited, a UK based healthcare products company. The acquisition consideration was GBP4.37 million, comprising GBP0.17 million in acquisition-related costs recognised as expense during the period, GBP0.04 million net inventory at completion and a balance of GBP4.16 million. The acquisition consideration paid was GBP4.2 million, comprising GBP4.16million plus the value at completion of the net inventory. The acquisition was funded through the Company's own resources which had been increased by way of a placing of new shares raising GBP18.75million (gross) during July 2018.
Dentyl is a unique bi-phase mouthwash with plaque removal claims. The Group acquired the brand to expand its oral care portfolio both domestically where it operates through an established infrastructure, and internationally via its B2B model. The Group expects that the inclusion of this additional brand into its portfolio will increase the leverage of its trading infrastructure and generate improved profitability. The acquisition has been accounted for under IFRS 3 as a business combination. The Consolidated Financial Statements include the results of trading of the Dentyl brand for the period from August 2018 to 31(st) December 2018.
The fair values of the identifiable assets and liabilities of the Dentyl brand as at the date of acquisition were:
Fair value
GBP'000s
------------------------ ----------
Assets
Non-current assets
Brand 1,089
Customer Relations 170
Distribution Agreements 19
Current Assets
Inventories 39
------------------------- ----------
Total assets 1,317
Non-current liabilities
Deferred tax (217)
------------------------- ----------
Total net assets 1,100
------------------------- ----------
Net Assets acquired 1,100
Goodwill 3,100
------------------------- ----------
Total Consideration 4,200
------------------------- ----------
Satisfied by:
------------------------ ----------
Cash paid at completion 4,200
------------------------- ----------
Revenue and profit impact of the acquisition
Dentyl contributed group revenues of GBP1.6 million and operating profit before exceptional items and management charges of GBP0.3 million in the period from August 2018 to 31(st) December 2018. If the acquisition had taken place on 1 January 2018, the first day of the reporting period under review, total Group revenue and operational profit before exceptional items and management charges for the period arising from Dentyl would have been GBP3.9 million and GBP0.9 million respectively.
8. Share capital and share premium
Share capital
All shares are authorised, issued and fully paid. The Group has one class of ordinary shares which carry no fixed income.
Ordinary Ordinary Share Merger
shares shares
of of
0.3p each 0.3p each premium reserve
Number GBP GBP'000 GBP'000
-------------------- ---------- --------- ------- -------
At 31 December 2018 83,712,106 251,136 30,824 7,656
-------------------- ---------- --------- ------- -------
At 31 December 2017 36,837,106 110,511 13,289 7,656
-------------------- ---------- --------- ------- -------
The Company issued 46,875,000 new shares during the year (zero in 2017).
The Group operates a Long-Term Incentive Plan. Up to the balance sheet date, there have been three awards under this plan, in which Executive Directors and senior management of the Group participate.
9. Interest-bearing borrowings
At 31 December At 31 December
2018 2017
GBP'000 GBP'000
----------------------------------------- -------------- --------------
Current
Invoice financing 1,240 965
Leasing obligations 485 485
Unsecured bank loans due within one year 186 59
----------------------------------------- -------------- --------------
1,911 1,509
----------------------------------------- -------------- --------------
Non-current
Deferred consideration - 426
Leasing obligations 2,741 3,211
Unsecured bank loans due after one year 2,416 2,606
----------------------------------------- -------------- --------------
5,157 6,243
----------------------------------------- -------------- --------------
All bank loans are held by the Group's Italian wholly-owned subsidiary, Biokosmes. During the year, an existing bank loan held with Unicredit SPA for EUR0.8 million, was extended to EUR3.1 million principal with an expiry date of May 2023. Invoice financing includes the Italian RiBa (or "Ricevuta Bancaria") facility and UK invoice financing facility with HSBC. Both are short-term facilities. The balance shown above of GBP1,240,000 (2017: GBP965,000) reflects the amount that had been settled in Biokosmes's account under RiBa and drawn against invoices in the UK as at the reporting date.
Deferred consideration reflects the fair value of a loan held by the Company with the vendors of Periproducts. The loan principal of GBP400,000 was repaid on 7 September 2018 and had an annual interest charge of 10% from September 2017. Its carrying value at 31 December 2018 was GBPnil (2017: GBP426,000).
A summary showing the contractual repayment of interest-bearing borrowings is shown below:
At 31 December 2018 At 31 December 2017
------------------------------ -------------------------------
Leasing Leasing
obligations Other 2018 obligations Other 2017
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ------------ ------- ------- ------------- ------- -------
Amounts and timing
of non-current debt
repayable
Between 1 January 2019
and 31 December 2019 - - - 486 612 1,098
Between 1 January 2020
and 31 December 2020 491 577 1,068 491 584 1,075
Between 1 January 2021
and 31 December 2021 489 533 1,022 489 533 1,022
Between 1 January 2022
and 31 December 2022 449 533 982 431 533 964
Between 1 January 2023
and 31 December 2027 1,312 773 2,085 1,314 770 2,084
----------------------- ------------ ------- ------- ------------- ------- -------
2,741 2,416 5,157 3,211 3,032 6,243
----------------------- ------------ ------- ------- ------------- ------- -------
Short-term Long-term Total
borrowings borrowings
GBP'000 GBP'000 GBP'000
--------------------------------------------- ----------- ----------- -------
Reconciliation of debt
1 January 2018 1,266 6,414 7,680
Cash flows:
Draw-down/(repayment) 160 (4,060) (3,900)
Non cash:
Movements in fair value and foreign exchange - 62 62
--------------------------------------------- ----------- ----------- -------
31 December 2018 1,426 2,416 3,842
--------------------------------------------- ----------- ----------- -------
Lease liability
In 2017 the Group adopted IFRS 16 which means that lease contracts that have previously been recognised as operating leases are now being recognised as finance leases. In the Statements of Financial Position additional lease liabilities at 31 December 2018 of GBP3,226,000 (2017: GBP3,696,000) are offsetting right-of-use assets of GBP3,132,000 (2017: GBP3,676,000), giving a net liability position of GBP94,000 (2017: GBP20,000).
10. 2018 Annual Report and Accounts and 2019 Annual General Meeting
The Group's Annual Report and Accounts for the year ended 31 December 2018 will be posted to shareholders on the 8(th) May. It will be available on the Company's website (http://www.venture-life.com/investor-relations/results-reports-and-presentations/) from 11.00am on 30th April 2019. The Annual General Meeting of Venture Life Group plc will be held on 3(rd) June 2019 at 10.30am at the offices of Simmons & Simmons LLP, CityPoint, One Ropemaker Street, London, EC2Y 9SS. A notice of meeting will be sent to shareholders with the Annual Report and Accounts (http://www.venture-life.com/investor-relations/shareholder-company-documents/) and a copy will be available on the Company's website in due course.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR UBUURKRASAUR
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