[source: Venture Life]
Venture Life (VLG ) announced this morning a trading update for the 6 months ended 30 June 2022 (H1 22).
Top Line Growth
The international self-care company said it expected revenues to grow 36% YoY to £18.9m in 1H22, reflecting recent acquisitions of BBI Health Care Limited and Helsinn Integrative Care Portfolio, and a strong recovery of the existing business following a difficult FY21.
Acquisitions contributed £6.3m to revenues, representing 10% and 6% of overall revenue growth for BBI and Helsinn respectively.
Outside the acquisitions, organic revenue growth was 1% YoY, driven by the increased number customer brands, which was in-line with market expectations.
Margin Expansion
The company said its gross margin and adjusted EBITDA margin improved by 4% and 3% respectively compared to 1H21.
Strong Balance Sheet
Cash inflow more than doubled to £1.5m from £0.7m reducing net debt before finance leases to £2.6m from £3.2m, and net debt after finance leases to £7.2m from £7.5m, versus December 2021.
Jerry Randall, CEO, commented: "The Group has delivered revenue growth in the first half primarily through the Acquisitions. The challenging retail environment continued in the first half, but I am delighted to see that, notwithstanding this, a number of our own brands, as well as some customer brands, have demonstrated strong revenue growth in the period. The margin improvement seen versus 2021 is particularly encouraging, and customers have been very responsive to our request to order further out than their normal lead times, enabling us to both ensure supply of raw materials and packaging in time to produce, and manage costs."
View from Vox
The company has indicated that supply chain issues experienced during FY21 are now easing up with increasing confidence that its margin protection strategy, which relies on cost management and passing on increases to customers when possible, remains robust.
Gross and EBITDA margin improvement in 1H22, despite a challenging economic backdrop, speaks to the effectiveness of this strategy and the positive impact the two acquisitions have had on the company's bottom line.
As a result, Venture Life's order book remains solid and ahead of 1H21, enabling the company to manage its supply chain cost-effectively.
Venture Life's operations in China were clearly affected by Covid lockdowns in 1H22, but as those are now lifting, we expect to see sales in China increase during the second half of 2022.
Historically, sales have been 2H weighted, which we expect to be further exaggerated this year by the growing momentum in the company's order book. Therefore, we expect full-year performance to be at least in line with market expectations.
Investors welcomed today's news with VLG shares up 6.25% in early trading.
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