At the end of this month Venture Life Group (LON:VLG) will be announcing its Interim Results for the six months to end-June.
I believe that they will show a significant advance for the year as a whole, while pointing to a very much better year in 2025.
The Business
Venture Life develops, manufactures and distributes products for the self-care market.
These non-drug products can be bought by consumers, without prescription, to help lead a healthier life.
This £59m capitalised business, which is based in Bracknell, Berkshire, has grown both organically and by strategic acquisition.
It has either developed or acquired and built up its own range of self-care products and brands.
Today it has two main manufacturing facilities – a 5,500 square metre plant in Milan, Italy, where it innovates, develops and manufactures in-house – as well as a 2,600 square metre facility in Gnesta, situated to the south of Stockholm, Sweden, where it has a fully automated filling production line.
The group’s range of products are sold to a network of international partners and to key retailers in the UK market.
It is also selling online through Amazon.
With its vertically integrated model it is able to innovate, develop and manufacture self-care products globally.
Within the UK and The Netherlands, the company has direct access to retail markets, including the key pharmacy and grocery multiples.
That direct route creates higher revenues per unit.
The group only invests money in UK consumer marketing to support the products.
The Product Range
The group’s portfolio includes some key products, such as the UltraDEX and Dentyl oral care ranges, the Balance Activ range in the area of women’s intimate healthcare, the Lift and Glucogel product ranges for hypoglycaemia, Gelclair and Pomi-T for oncology support, Earol for ear wax removal, products for fungal infections 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 and The Netherlands, these are supplied direct by the company to retailers, elsewhere they are supplied by the group’s international distribution partners.
Its products are now sold in over 90 countries globally.
Trading Update
Just over a month ago the company issued a Trading Update, reporting that sales were in line with expectations, while showing strong growth for the VLG brands in the UK market and through Amazon.
It reported that revenues, as normal, will be weighted towards the second half, particularly in the case of its international partners.
The group’s strong order book provides good visibility over current revenue guidance and continues to build, notably comprising a much greater apportionment of higher margin VLG Brands than compared to the same time last year.
The company remains confident that trading for the full-year financial performance is on-course to be in line with market expectation.
CEO Jerry Randall stated that:
“I am thrilled by the performance of VLG’s Brands within the UK; we have launched some great new products over the last year and continued to grow our distribution points, most significantly across core brands, including Lift, Balance Activ and Earol.
The increased investment in focused marketing activity, plus the strengthening of relationships with major retailers, is delivering evident results and has put us well placed to quickly build-out further, with exciting potential collaborations also under discussion within Europe.
Further, we have taken steps to internalise production of the recently acquired Earol brand and have begun manufacturing these products from Biokosmes during H2 which will deliver further gross margin improvement.”
Analyst Views
Chris Donnellan and Stuart Harris at Cavendish Capital Markets are bullish about the group, reckoning that:
“Having exited 2023 in excellent shape it appears that H1 2024 continued similarly.
The company is delivering on its strategy of organically growing revenues with targeted marketing on its core brands and steadily expanding the margins via product mix and manufacturing efficiencies.
Good free cash flow generation is creating a stronger balance sheet and should allow the company to re-engage its M&A strategy in the future.”
Their estimates for the current year to end-December are for £55.0m (£51.4m) sales, with adjusted pre-tax profits of £3.1m (£1.8m), and earnings of 5.5p (5.3p) per share.
For 2025 they estimate £59.4m revenues, £5.5m profits and 6.9p earnings.
The 2026 year could see £64.5m in group sales, £7.2m profits and 7.9p in earnings per share.
They have a 68p a share Price Objective, compared to the current 46.5p.
In My View
I like the growth story of this totally vertical trading group.
The Interim Results statement on Monday 30th September should make good reading, while further highlighting the attractions of its shares and their potential upside.