Venture Life Group Plc

0.25 (0.65%)
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 Shares Traded Last Trade
  0.25 0.65% 38.75 73,780 08:14:23
Bid Price Offer Price High Price Low Price Open Price
38.00 39.50 38.75 38.50 38.50
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Miscellaneous Food Stores 43.98 0.52 - - 49.02
Last Trade Time Trade Type Trade Size Trade Price Currency
08:31:53 O 2,967 38.55 GBX

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Date Time Title Posts
26/5/202314:16Venture Life Group plc1,645
17/9/202110:16ValueGrowth Investing35,070
02/4/201510:58Venture Life Group - Intro video-

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Venture Life (VLG) Most Recent Trades

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Venture Life (VLG) Top Chat Posts

Top Posts
Posted at 26/5/2023 09:22 by eagle eye
I may be wrong, but with recent share price weakness and Capital Markets Event coming up, maybe the City has wind of an acquisition and cash raise coming up.
It's pure speculation but these things do happen.

Posted at 25/5/2023 14:59 by celeritas
Business is motoring along nicely, the current share price is an anomaly so no wonder a director took a nice chunk, he does like a £50k block.
I expect we'll see a few more.
I've no doubt Paul McGreevy is increasing Vlg's international footprint.

Posted at 22/5/2023 09:25 by brummy_git
Another encouraging trading update from niche OTC healthcare firm Venture life today.

All the details here.


Posted at 22/5/2023 07:19 by rivaldo
An encouraging AGM statement today. Everything proceeding smoothly with no surprises - which is what we want to see after past hiccups.

VLG are confident about delivering in line with expectations. With the consensus of Cenkos's and Singer's forecasts being 4.92p EPS this year, that puts VLG on a current year P/E of just 8.2.

Posted at 13/4/2023 17:18 by sev22
This recommendation appears in the latest edition of Investors Chronicle which is available from tomorrow.

A self-care specialist with a lot of potential.

It offers a robust order book, upside from acquisitions and scope for strong earnings growth, too.

By Simon Thompson.

Aim-traded Venture Life (VLG:39.25p), a developer, manufacturer and distributor of products for the self-care markets, flagged up its annual results in a pre-close trading update at the end of January, but there were still positive surprises.

Last year’s adjusted cash profit of £9mn came in £0.3mn ahead of joint house broker Cenkos Securities’ forecast, customer brands delivered eye-catching 41 per cent growth in like-for-like revenue to £20.8mn (47 per cent of group total), and the closing order book was more than 114 per cent ahead of the same period in 2021.

Customers have been ordering further ahead than in previous years not only to ensure continuity of supply, but to lock in prices in an inflationary environment. Therefore, it’s reassuring to note that after encountering supply chain as well as input and inflation challenges last year, Venture is now seeing downward movement in input prices, improved product availability and an easing of energy prices. This augurs well for the delivery of the order book at a solid margin.

It also augurs well that management has been extending the group’s geographic footprint, signing 12 new long-term overseas distribution agreements, launching 16 new products last year through international partners, with an additional 15 products launched since the year-end. The eye-catching performance from some past acquisitions is worth noting, too.

Reaping the upside from acquisitions.

*2022 cash profit and revenue up a third to £9mn and £44mn
*17 per cent pro-forma like-for-like revenue growth
*£13mn acquisition of ear-nose-throat brands in November 2022
*Order book 114 per cent higher than 12 months ago

Both of Venture’s 2021 complementary acquisitions continue to perform well – BBI Healthcare, a market-leading women’s health and diabetes/energy management company; and oncology support product company Helsinn. BBI’s key brands are Balance Activ, the leading UK brand for the treatment of bacterial vaginosis; Glucogel, the number one glucose gel prescribed in the UK for hypoglycemia; and Lift, a range of glucose gels, shots and chewable tablets.

International sales of Balance Activ (14 per cent sales growth on a like-for-like basis) helped the product contribute £5.5mn of revenue, the brand accounting for 12.5 per cent of the group total. Lift performed even better, delivering eye-watering 36 per cent higher like-for-like revenue of £4.2mn to account for almost 10 per cent of group revenue. Increasing sales to independent pharmacies, a general sales rebound post-Covid, and the launch in Ireland with a new distributor were key to the brand’s outperformance. Importantly, the momentum has continued into 2023.

Helsinn’s main brands, Gelclair and Pomi-T, should deliver higher sales this year, too, after Venture signed major distribution agreements in Brazil, Canada, Vietnam and Germany. Gelclair is a muco-adhesive oral rinse gel used for painful symptoms of oral mucositis (a side effect of some cancer therapies), and Pomi-T is a polyphenol mix of whole foods used for the management of prostate-specific antigen (PSA) levels in prostate cancer.

Venture’s annual results benefited from one month’s revenue contribution from three HL Healthcare ear-nose-throat brands (Earol, EarolSwim and Sterinase) purchased at the tail end of 2022. The brands are sold directly to wholesalers and retailers in the UK and to licensing partners internationally, through a distributor network across 23 countries across central and eastern Europe, Canada, and the Middle East. End-market demand is well underpinned.

For instance, sales of Earol have grown significantly over the past five years due to ear wax removal (EWR) and general ear care transitioning away from primary care to private audiology clinics, and an ageing population and technological advancements in hearing aids boosting demand for EWR and prophylactic ear care. Both growth drivers are unlikely to wane anytime soon.

Furthermore, Earol, EarolSwim and Sterinase are high-margin products that earned a cash profit margin of 38 per cent on annual revenue of £4.5mn in the 2022 financial year, well above Venture’s 20.4 per cent margin in 2022. The maximum consideration payable of £13mn (£8mn cash on completion, £3mn contingent consideration and £2mn subordinated loan note) equates to a sensible multiple of 7.7 times cash profit.

Implication on forecasts.

Post results, analysts at Cenkos edged up their 2023 revenue to £50.7mn, implying 15 per cent year-on-year growth, with almost two-thirds of the increase accounted for by a full 12-month contribution from the newly acquired HL Healthcare’s ear-nose-throat brands. It’s a more profitable business mix, too, as highlighted by a projected 2.3 percentage point improvement in group gross margin to 42.5 per cent and a higher cash profit margin of 23 per cent, up from 20.4 per cent in 2022. On this basis, cash profit is forecast to rise 29 per cent to £11.6mn.

Importantly, the directors are not only focused on delivering organic revenue growth from existing brands, but deleveraging the balance sheet. This explains why analysts at Cenkos forecast year-end net debt (excluding IFRS 16 lease liabilities) to be slashed from £16.6mn to £9.5mn, the debt reduction being underpinned by estimated net cash of £11.9mn generated from operations. This implies closing net leverage of 0.8 times annual cash profit, down from 1.4 times at the end of 2022.

In other words, the £49.5mn market capitalisation company’s forecast year-end enterprise valuation of £59mn equates to only five times cash profit estimates, or less than half the rating of peers. That’s a low multiple for a recovery play that is now benefiting from tailwinds and is set to de-gear its balance sheet, thus transferring more of the economic value in the entity from debt holders to shareholders.

The bottom line.

So, having rated Venture’s shares a buy, at 28p, when I covered the half-year results (‘Nothing ventured, nothing gained’, 22 September 2022), and reiterated that advice at 36p (‘Investors are being too cautious with this self-care stock’, 11 January 2023), I feel that the shares, at 39.25p, have potential to double in value. BUY.

Posted at 07/4/2023 09:55 by brucie5
Excellent news. Hopefully this time share price will reflect.
Posted at 03/4/2023 15:34 by celeritas
This from LSE, thanks Agricore.

've been intrigued by the seemingly innocuous phrase:
"Group leverage 1.4x at end of 2022 is expected to fall in 2023 to 1.0x or lower by the end of 2023, due to the cash generative nature of the business, now including the highly cash generative Earol brand."
The analyst coverage from Singers estimates a £8.5m adj EBITDA for 2022 and £14m net debt......
Well that is a 1.65x ratio so either the debt is lower or the profit is higher than that assumed by Singers.
For example is actual adj profits for 2022 is £10m and net debt is £14m then that's 1.4x.
Either way that's a surprise to the upside.... for Singers and Cenkos at least.

I've estimated using the HL run rate profit plus the VLG run rate operating profit that once again the 2023 numbers are simply too conservative versus what's happening on the ground. In the update 13th March it's revealed that the ratio has dropped to 1.3X as at 28/02/23 suggesting that 1X by year end pro rata we are looking at more like a ratio of 0.7X.

But this assumes a level run rate. We know that there's a growing order book, China, contribution from Earol. With a conservative 17% growth (as seen in 2022) an adj EBITDA/debt of 0.5x or lower.

But Singers speaks to an 2023 "equity free cash flow yield percentage" of 14.3%. Decrypting that Equity is £74m (as at 30/6/22) and 14.3% is £10.6m. So if that's true, FCF 2023 should drive the ratio to about 0.3x by end of 2023.

Whichever metric you consider, compared to current market expectations VLG appears to be cash generative, stable and paying down debt more rapidly than it is being credit for. It gives a potential war chest for further acquisitions but also the idea that dividends could follow. A 4p a share dividend (10% yield) would cost £5m a year. Affordable from FCF. I'm glad the business is paying down debt as debt is expensive (a £1.5m annualised finance cost using June 2022's numbers). But it does highlight the value to the current share price doesn't it?

Posted at 13/3/2023 08:38 by stemis
Almost as exactly as analysed on here. The market being what it is however, when there's worries of a problem, share price falls 4p. Turns out there is no problem, share price recovers 2p.
Posted at 11/3/2023 17:44 by melody9999
I've been looking at the impact of the SVB facility not being available.

1 From the HY:
At 30 June 2022, the Group has drawn net £8.5 million (Dec-21: £8.5m), which has been used to pay down all other debt in the Group and the first payment for HICP.

The facility was called upon to make the second and final payment in relation to the acquisition of HICP in August 2022 and we expect the overall amount drawn to come back in line with the end of June 2022 level of drawdown by end of the year, before any further acquisitions.

2 Acquisition of Earol etc
Acquired three new Ear-Nose-Throat ("ENT") brands (the "Brands") through the acquisition of the entire issued share capital of the UK based company, HL Healthcare Limited ("HL") for a total consideration of £13.0 million.

The total consideration of £13.0 million will be settled by an initial cash consideration of £8.0 million, £3.0 million contingent consideration based on revenue performance for the year ending 31 March 2023 and the issue of a £2.0 million subordinated loan note, due to mature in 2024.

So c £16.5M of the facility may be drawn at present and VLG may be 'on the hook' for up to £3M consideration at the end of March.

In the meantime VLG recorded cash of £5.393M at Jun 22, £7,896M at Dec 21 and £5,235M at Jun 21. They have used the SVB facility to pay down all other debt so no problem there.

So I'm thinking that this is an unwelcome challenge for VLG but no more than that. that. Guess they will be thinking of asking Santander to find alternative finance if SVB fails. VLG have been trading well since the SVB facility was put in place, so perhaps they are in a better place to obtain competitive terms?

Am I missing anything? What do others think?

Posted at 02/12/2022 10:45 by rivaldo
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."

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