In Boxing, it’s often said that a "good big 'un will beat a good little 'un". However this principle doesn’t necessarily apply in the investment world, especially where there is a wide disparity between large and smallcap valuations.

For example ‘pound-for-pound’, I think consumer healthcare product firm Venture Life (VLG) - market cap: £40m - offers much better upside potential than FTSE 100 giant Haleon (HLN). The £31bn behemoth expanded LFL turnover in H1 23 at 10.4% (7.5% price vs 2.9% volume growth – whilst sporting 24.5% EBITDA margins, carrying net debt of £9.5bn (or 3.4x EBITDA) and trading on 21x PE, 14x EV/EBITDA and 3.8% FCF yield multiples.

In contrast, this morning Venture Life similarly reported in line H1’23 results - including LFL sales up 10.4% to £23.5m but importantly - and in contrast to Haleon driven by +8% volume versus 2% price. It also reported rising EBITDA margins (18.9% vs 17.6%), strong cash generation (+159% to £4.8m) and lower net borrowing (£15.3m, or 1.47x EBITDA vs 1.65x December 23). Even after paying a final £3.0m instalment of its £13m HL Healthcare Ltd acquisition in December 22.

Here, the impressive top line performance was driven primarily by volume growth particularly relating to its own brands such as Balance Activ, Lift and Earol brands which account for 55% of group turnover. Moreover, momentum is building, since its own products should continue to enjoy future revenue success thanks to increased retailer distribution - 17 new listings including Tesco and ASDA adding an estimated +£1.3m revs a year, online expansion via Amazon and direct-to-consumer, and new launches.

This says to me that there is robust underlying demand for its niche and largely non-discretionary items, despite hard-up consumers pulling back on spend elsewhere. Sure, issues at Dentyl mouthwash and with China remain. Yet equally, these are being addressed, whilst input costs are also falling, which should help contribute to future improved economies of scale and margins.

The shares look very cheap, too, unlike Haleon. I estimate the business will generate FY23 turnover, adjusted EBITDA, and EPS of £50.5m, £11.6m & 4.3p respectively, with net debt declining to 1.1x - or £12.8m - by the year end. This puts the stock on attractive multiples of 4.7x EV/EBITDA and 7.5x PER, on top of a churning out a juicy 15%+ free cashflow yield.

CEO Jerry Randall commented: ”Post period trading continues to perform well. We anticipate strong sales growth in H2 across our VLG Brands, including the impact of new distribution in the UK which is bolstered by new product launches and the continued strong sales growth from our Customer Brands. The order book remains strong and is c.35% up since Dec’22, providing strong visibility and underpinning the Board’s confidence in meeting FY’23 expectations.

The growth is driven by our higher margin Venture LifeBrands giving us confidence in improving H2 gross margins, [supported too] by a tight control of costs”.