TIDMVLG
RNS Number : 9309Z
Venture Life Group PLC
24 September 2020
24 September 2020
VENTURE LIFE GROUP PLC
("Venture Life" or the "Group")
Unaudited interim results for the six months ended 30 June
2020
Venture Life Group plc (AIM: VLG), a leader in developing,
manufacturing and commercialising products for the
self-care market, presents its unaudited interim results for the six months ended 30 June 2020.
Financial highlights:
-- Revenues increased 80% to GBP16.9 million (H1 2019: GBP9.4 million)
-- Of this revenue growth 65% was organic, and 15% was through the acquisition of PharmaSource
-- Venture Life Brands represented 53% of revenues (H1 2019: 30%) resulting in higher margins
-- Gross profit increased 97% to GBP6.9 million (H1 2019: GBP3.5 million)
-- Adjusted EBITDA (1) increased 368% to GBP3.5 million (H1
2019: GBP0.7 million) implying an EBITDA margin of 21%
-- Profit before tax, amortisation and exceptional items
increased nine-fold to GBP2.7 million (H1 2019: GBP0.3 million)
-- Adjusted profit per share (2) of 2.85p (H1 2019: 0.15p)
-- Cash at period end of GBP6.6 million (31 December 2019:
GBP10.7 million) primarily reflecting payments for the acquisition
of PharmaSource and inventory build as a response to COVID-19
Commercial highlights:
-- The whole business, including Venture Life's manufacturing
facility in Italy was kept operational throughout the COVID-19
lockdown
-- New 15-year exclusive distribution agreement signed with the
Group's oral care partner in China, with minimum purchase
obligations of EUR168 million
-- Revenues of GBP2.3 million delivered via our oral care
partner in China (H1 2019: GBPnil), with a strong order book for H2
2020
-- UltraDEX became the UK's market leader for Halitosis Mouthwash by market share
-- Eight new long-term exclusive distribution agreements signed
-- 11 new development and manufacturing agreements signed
-- Acquisition of PharmaSource BV, integration on track
-- Appointed as second manufacturer of Alliance Pharma's key brand Kelo-cote
-- Developed new business unit producing our brand DISINPLUS
hand sanitising gel and anti-bacterial line
-- 1 million units of hand sanitising gel sold to ASDA in UK
Post-period end highlights:
-- Boots to launch Dentyl in H2 2020
-- New Unicorn and Mermaid Dentyl editions launching in UK
-- New Dentyl toothpaste to launch in UK and internationally
-- Lloyds Pharmacy to launch newly acquired PharmaSource fungal nail products in the UK
-- Dutch retailer DA to launch new products in the Netherlands
-- Three new long-term exclusive distribution agreements signed
-- Dentyl Dual Action mouthwash participating in independent
clinical study at Cardiff University on patients affected with
COVID-19
1 Adjusted EBITDA is EBITDA before share-based payments and
exceptional items
2 Adjusted profit per share is profit after tax excluding
amortisation, exceptional items and share-based payments.
Jerry Randall, Chief Executive Officer of Venture Life,
commented: "The first half of 2020 has seen an exceptional
performance from our business, despite the significantly
challenging global circumstances faced by the world due to
COVID-19.
80% revenue growth and five-fold EBITDA growth delivered at such
a time is a result of the incredibly committed and hard-working
people we have within the business, who continued to work
tirelessly throughout this time. I pay particular tribute to our
employees at our operations in North Lombardy, Italy, who not only
kept the plant operational but also rapidly launched our DISINPLUS
hand sanitising gel range.
The significant new deal with our Chinese oral care partner adds
substantial long-term value to the business and has already had a
positive impact on our H1 results. Despite the challenging
environment the rest of the business continues to trade well, and I
am particularly pleased with the smooth integration of our latest
acquisition, PharmaSource, which is also on track to achieve its
growth targets in 2020; we are already benefiting from a number of
synergies from this acquisition.
Despite the current challenges, Venture Life has delivered an
exceptional first half result with a strong order book ahead, and
we approach the future with confidence."
For further information, please contact:
Venture Life Group PLC +44 (0) 1344 578004
Jerry Randall, Chief Executive Officer
Andrew Waters, Chief Financial Officer
Cenkos Securities plc (Nomad and Joint Broker) +44 (0) 20 7397 8900
Stephen Keys / Cameron MacRitchie (Corporate Finance)
Russell Kerr / Michael Johnson (Sales)
N+1 Singer (Joint Broker)
Shaun Dobson / Carlo Spingardi (Corporate Finance) +44 (0) 20
7496 3000
Jonathan Dighe (Sales)
Non-Executive Chair's and Chief Executive Officer's
Statement
Overview
The Group is pleased to report substantial progress across all
areas of the business, despite the global impact of COVID-19. In
the first half of 2020, revenues grew by 80% to GBP16.9 million (H1
2019: GBP9.4 million) , with even stronger EBITDA growth, seeing a
five-fold increase over H1 2019 to GBP3.5 million (H1 2019: GBP0.7
million) and ahead of the full year EBITDA of GBP3.0 million for
2019. H1 2020 also generated a substantial turnaround in the profit
after tax position, delivering profit after tax of GBP1.6 million
compared to a loss of GBP0.4 million in H1 2019.
The Group's operations continued throughout the COVID-19
lockdown in the three countries of operation from March to July
2020 and, most notably, the operations at the Development and
Manufacturing facility in Northern Lombardy, Italy, which was the
first area heavily impacted by the virus in Europe. The employees
of the entire Group worked tirelessly to maintain operations,
particularly in Italy where the vast majority of the Group's
products are manufactured. In very difficult and testing
circumstances, we thank every employee for their commitment and
dedication to support their colleagues and the business.
The top priority for management was to ensure that employees
were protected and kept safe at all times, which included extensive
use of personal protective equipment, temperature monitoring
throughout the day, split shift patterns, rigorous cleansing
routines and the exclusion of external visitors. These efforts
enabled us to protect our staff, maintain production and ensure the
continued delivery of our customers' products. Furthermore, as a
result of requests from local Italian Health Authorities, and with
rapid and insightful actions of our team, we began producing hand
sanitising gel (HSG) to supply to local hospitals and pharmacies
overwhelmed by the impact of the virus in the early days of March.
Initially supplied free, this production enabled hospitals and
pharmacies to continue to receive and treat patients.
We rapidly developed our own brand of HSG, called DISINPLUS, and
have now expanded the range to include eight products including
anti-bacterial surface spray, and these have been successfully sold
to many customers in the UK, Italy and the rest of Europe, as
detailed later.
Revenues for the Venture Life Brands business were GBP9.4
million (H1 2019: GBP2.8 million) an increase of 233% over the
prior year, or excluding the acquired revenues of PharmaSource
revenues were GBP7.9 million, an increase of 182% over the prior
year on a like-for-like basis. We saw a small fall in the UK retail
channel due to lockdown, and some orders being delayed by
international partners for the same reasons. Despite this
international sales in the first half of 2020 overall were
significantly higher than in H1 2019, and were boosted by strong
sales to our Chinese oral care partner and of the new DISINPLUS HSG
products. Revenues from the Customer Brands business grew 15% to
GBP7.5 million (H1 2019: GBP6.6 million). We have seen a delay of
some orders from a small number of customers due to COVID-19, but
overall we have seen good growth across the business.
Whilst we experienced the strong positive impact of the HSG
sales in the first half of 2020, we also experienced some
reductions in expected revenues both in the UK and with our
international partners as a result of the COVID-19 pandemic, as
well as incurring some additional costs. We expect our HSG sales to
continue into 2021 and beyond, albeit at lower levels than in 2020,
and we expect to benefit from the short-term entrants to this
market, which capitalised on peak demand with low quality products,
beginning to fade. The peak HSG sales in Q2 2020 balanced delayed
business and costs in other areas, and we expect overall Group
revenues in 2021 and beyond to remain robust, as any reduced level
of HSG sales is balanced by the return of higher levels of UK and
international sales.
The increased revenue growth, combined with our current product
offering, has also improved the Group's gross profit margin, which
rose to 41%, up from 37% in the first half of 2019.
We experienced an increase to our cost base due to the inclusion
of the PharmaSource business, some one-off costs associated with
the COVID-19 pandemic, and in IFRS related non-cash charges as a
result of our larger revenues and share based payments. However,
the majority of the additional gross margin generated over the
first half of 2020 flowed through to EBITDA, delivering a five-fold
increase in EBITDA to GBP3.5 million compared to the first half of
2019 at GBP0.7 million. The Group maintained a healthy cash balance
of GBP6.6 million at 30(th) June 2020, only GBP4.1 million below
the level at 31(st) December 2019 (GBP10.7 million), despite paying
EUR6.5 million for PharmaSource in H1 2020, and increasing
inventory levels by approximately GBP2 million by 30(th) June 2020
to ensure customers continue to be securely supplied during the
pandemic. Excluding any further bolt-on acquisitions, we still
expect to have a good net cash position at the end of the year.
There is no doubt having a strong balance sheet helped us to secure
key raw materials and supplies during the pandemic, at a time where
supply chains were giving priority to those who guaranteed quick
payment.
The rapid increase in revenues during this first half has also
led us to invest earlier in our manufacturing capacity to ensure we
have a strong capacity at our site in Italy. During 2020, we will
be investing up to EUR1.5 million in the Development and
Manufacturing facility to increase capacity to 55 million units per
annum by the end of the year, which is 15 million units ahead of
our original plan for 2020. With this new investment, and even
given the significant revenue growth expected for 2020, we still
expect to have over 40% capacity at our development and
manufacturing facility at the end of 2020, with more options for
further incremental capacity increase available to us which we can
comfortably fund ourselves.
We continue to review strategic bolt-on M&A opportunities,
which are available at this time. Being in a net cash position and
with the opportunity to receive more debt funding, the Group will
continue to look for suitable earnings accretive acquisitions that
will make use of its significant operational leverage. The use of
low cost debt is attractive for suitably priced cash generative
assets, but the Group will ensure it does not over-leverage its
balance sheet, and will ensure it retains a net debt (excluding
finance leases) to EBITDA ratio of 2 or less.
The PharmaSource acquisition that completed on 24(th) January
2020 is substantially integrated within the Group already. All
commercial operations are fully integrated, along with the majority
of administrative functions. The transfer of manufacturing from
external contractors into our Biokosmes facility is ongoing and
expected to be complete by the end of 2020, such that production
can commence during 2021.
Venture Life Brands
The Venture Life brands business' revenues for the first half of
2020 were GBP9.4 million (H1 2019: GBP2.8 million), a 233% increase
over first half of 2019. Revenues for the first half of 2020
comprise GBP3.7 million (H1 2019: GBP2.4 million) in the UK, and
GBP5.7million (H1 2019: GBP0.5 million) internationally.
UltraDEX
UltraDEX revenues for the first half of 2020 rose by 25% to
GBP1.7 million. This comprised UK revenues of GBP1.0 million, down
by 20% compared to H1 2019 (GBP1.3 million), and international
revenues of GBP0.7 million, up five-fold over H1 2019 (GBP0.1
million). UK revenues were affected by the lockdown period for
COVID-19, which saw a decrease in footfall in the pharmacy channel,
Boots being the worst affected, despite growth in the retail
grocery and online channels, as shoppers looked to buy all their
shopping from the grocery multiples due to lockdown shopping
restrictions. The spray was one of the affected products, due to
its on-the-go positioning, as this is often an impulse purchase and
with fewer people in stores, this meant less sales. The sales of
the core mouthwash product initially rose with stockpiling
purchases in April and May, but then slowed in the proceeding
months. However, since the end of the first half, sales have
continued to improve.
Given the challenging market conditions in the UK during H1
2020, it was pleasing to see that UltraDEX in the UK has continued
to take market share from its competitors, and is now the largest
brand in the medicated fresh breath mouthwash category in the UK.
In the 12 weeks to the end of June 2020, it achieved a 49%(1)
market share of the medicated fresh breath mouthwash category
compared to 37% in the same period two years ago. In that same
time, its main competitor has fallen from a 51% market share to 43%
market share, demonstrating the strength of UltraDEX as a brand,
and its multi-channel approach in the UK market.
Internationally, we have seen growth in UltraDEX sales with
various existing and new partners, as we continue to grow the
geographical footprint of the brand, and have good orders on hand
for H2 2020.
_________
(1) Source: Nielsen data
Dentyl
Dentyl revenues for the first half of 2020 rose by 161% to
GBP2.8 million (H1 2019: GBP1.1m). This comprised of UK revenues of
GBP1.2 million (H1 2019 GBP1.1m), and international revenues of
GBP1.6 million (H1 2019: GBPnil), which was predominantly to our
oral care partner in China.
In the UK, revenues for Dentyl were less affected throughout
lockdown than UltraDEX, reflecting its current listing, which is
weighted more in grocery multiples than pharmacies, and we achieved
a number of positive results for the product in the retail channel.
During the first half, Dentyl launched for the first time in some
new smaller retailers. In the second half, there will be a number
of new initiatives for the brand, including:
-- The new Dentyl Mermaid and Unicorn versions will be launched
in the UK, in Superdrug and Lloyds Pharmacy amongst others. These
will also be launched by our partner in China;
-- Boots have agreed to launch Dentyl in 800 of their key stores
(November), which signals the return to this retailer for the first
time in four years; and
-- The new Dentyl toothpaste will be launched in the UK.
Following the transfer of manufacturing to our facility in Italy
during 2019, from external contract manufacturers, the packaging
problem experienced by our Chinese partner was rectified. As a
result, our partner relaunched the marketing of the brand in China
and placed significant orders with us in the early months of the
year. We received almost EUR4.0 million orders for Dentyl, for
delivery in 2020. The hiatus during the lockdown in China caused a
delay in sell out of the product but now online channels are moving
back toward pre COVID-19 levels and marketing has recommenced.
During the last 12 months, we have developed some line
extensions for this Dentyl brand:
-- A Dentyl Mermaid and Unicorn version of the bi-phase
mouthwash, which is targeted towards the younger consumer; and
-- Three toothpastes designed to partner the three core
mouthwash flavours of Fresh Clove, Smooth Mint and Icy Cherry.
Post-period end, we were delighted to report that we are
supporting a clinical study being undertaken by the University of
Cardiff to investigate the potential of OTC mouthwashes such as
Dentyl, to reduce the viral load (amount of virus in patients'
saliva) in those patients affected with COVID-19. We are supporting
this valuable study both financially and with product. Initial
research raised the possibility that cetylpyridinium chloride (CPC)
could be used to help reduce transmission of enveloped viruses such
as SARS-CoV2 (COVID-19), but that more research was needed to test
this idea. The clinical study aims to investigate if OTC
mouthwashes such as Dentyl can reduce the viral load in the mouth
and therefore help to reduce the possible transmission of COVID-19.
Initiated to support dentists safely treating patients at this
time, this could have wider reaching value in the fight against
COVID-19. Our Dentyl product contains CPC as its main active
ingredient.
The study started in late August 2020 and the results are
expected to be published within six months.
Hand sanitising gel (HSG) - DISINPLUS
At the start of the lockdown, there was a significant shortage
of HSG in the Lombardy region of Italy, as became the case
globally. Local government in Lombardy contacted us to ask if we
could produce a HSG because, as the pandemic took hold in the
region, hospitals and pharmacies were not able to source it and
this was preventing the hospitals admitting new patients.
In 2004 and before becoming part of the Group, Biokosmes
independently developed and manufactured HSG at the time of the
SARS epidemic; we were, therefore, able to start production of the
formulation within 11 days. Initially, we supplied HSG to hospitals
in Lecco and Sondrio, and local pharmacies in Northern Lombardy,
free of charge. Then as the Italian Government provided investment
into the health system, we sold HSG to them. However, at the same
time there was strong demand from retailers in short-supply of HSG,
so we began to increase production using an existing filling
line.
The efforts of the team at Biokosmes gained local and national
news coverage, and also helped establish our position as an
essential supplier. This was important as at the most severe stage
of lockdown in Italy, all but 'essential' businesses in Italy were
ordered to close. Our production facility was allowed to remain
open, not only to produce HSG but also to fulfil all other customer
orders. We created our own brand around this sanitising gel
product, called DISINPLUS, and this was our largest brand by
revenue in the first half of 2020, delivering GBP3.2 million of
revenues. Whilst we do expect the demand for HSG to continue, we do
not expect the second half of the year to replicate the revenues in
the first half, as there was clearly a demand peak in Q2 2020 when
the pandemic hit Europe. However, we do expect to continue to
generate revenues from this brand in the coming years, and we have
expanded the range to eight products now, including anti-bacterial
sprays. We created this new brand at minimal initial cost and
limited on-going costs will be required to support the
business.
As the demand for HSG became very high all across Europe, we
decided to acquire a new filling line on short notice at a cost of
EUR110,000. This machine increased production capacity to 1 million
pieces of 100ml HSG per month. Such was the demand at this time, we
achieved full payback on the machine within one week due to the
additional production capability. We set up a specific division to
handle the commercialisation of HSG, and began supplying retailers
in Italy, UK and other countries. Notably we secured an agreement
in the UK with ASDA to supply 1 million pieces of 100ml HSG, all of
which was supplied in H1 2020. The relationships we have now
established directly with Italian retailers through this initiative
has allowed us to initiate discussion with these retailers
regarding other Group products.
Venture Life - other brands/products
We signed a total of eight new long-term distribution agreements
in H1 2020, across brands including Dentyl, UltraDEX, Myco Clear,
Procto-eze Plus and the newly acquired PharmaSource nail fungal
products. Post period end, we signed a further three distribution
agreements. As we progress into H2 2020 we expect to see more
partners coming on board.
Customer Brands
Customer brand revenues in the first half grew by 15% to GBP7.5
million (H1 2019: GBP6.6 million). This was driven across a range
of customers. We saw a number of customers lower their
expectations, and hence orders, for the year due to COVID-19,
however this was offset by businesses continuing to progress
positively and even place orders earlier to ensure that they would
receive supply of product later in the year.
During the period, we signed 11 new development and
manufacturing agreements for customer brands which are expected to
generate future revenues, including products being developed under
the new Medical Device Regulations (MDR). The new MDR was due to
come into force on 1(st) May 2020 but, due to the impact of
COVID-19, the implementation has been delayed until May 2021.
Nevertheless, we were on track to complete all necessary works to
meet the May 2020 deadline.
During the period, we were appointed as second manufacturer to
Alliance Pharma plc for Kelo-cote, their largest product by
revenue. None of this product was produced in the first half, but
we have significant orders in hand for production in H2 2020.
Post-period end, we have continued to attract more new business
to this division which will bring new additional revenues in 2021
and beyond, which we will provide an update on in due course.
Production facilities
Due to the significant increase in orders and revenues in 2020,
we have accelerated the investment plan at the facility in Italy,
and propose to invest up to EUR1.5 million this year in order to
take capacity at the facility to 55 million units per year by the
end of 2020. This will ensure we still retain significant capacity
for future growth in production from both organic and acquired
growth. This investment had already begun in the first half, with
the movement of secondary packaging operation moved to an external
facility, that we rent. This has created additional space
internally that will be used for filling lines to increase
throughput. During the first half, we acquired two further filling
lines, as well as undertaking additional capacity upgrades to
essential plant services including water supply and fire safety. In
addition to the new line for HSG, we acquired a second filling line
for pen products such as the products developed by PharmaSource and
the UltraDEX spray.
Further investment in capacity growth will continue in the
second half of the year as mentioned earlier, but despite this, we
still expect to be in a better net cash position by the end of the
year.
PharmaSource
We completed the acquisition of PharmaSource BV on 24(th)
January 2020, and results from this acquisition are included in our
consolidated accounts from that date. PharmaSource was founded in
2011; it developed and then commercialised a series of medical
devices to treat fungal nail infections and warts, and also a
number of products for women's health and mouth ulceration.
Unaudited revenues for the business for the year ended 31(st)
December 2019 were EUR2.6 million, and profit before tax was EUR0.9
million. The business grew revenues by 25% in 2019 and is on track
to achieve revenue growth of 20% in 2020, prior to any synergies
with Venture Life. The acquisition cost of the business was EUR6.5
million in cash, the majority of which was paid in H1 2020. The
acquisition was funded out of our own cash reserves, supplemented
by additional term debt from Banco Popolare Milano Srl, as detailed
in the below.
The business employs six staff and is based in Breda, in The
Netherlands. The acquisition was immediately earnings enhancing and
brought with it access to key pharmacy retailers in the
Netherlands, including Kruidvat BV, as well as international
revenues in the UK (through Superdrug) and Germany.
The rationale for the acquisition of this fast growing and
profitable business is:
-- to enhance Group profitability;
-- to acquire a number of high-quality medical device products to enhance our Group's portfolio;
-- to gain access to their existing customer relationships in
The Netherlands through the pharmacy channel, in particular with
Kruidvat. We hope to direct our existing products through this
channel as well; and
-- to expand our geographical footprint and enter a territory
which has similar characteristics to the UK and where key account
management can be used to access the larger part of the pharmacy
and grocery multiple markets through key retailers.
As well as acquiring the valuable business, we expect to enhance
value for our shareholders through the following synergies:
-- Distributing more of our existing brands/products through
PharmaSource's existing customers in The Netherlands and
abroad;
-- Expand the geographic footprint of the existing PharmaSource
products through our own business development team;
-- Undertake new product development to broaden PharmaSource's current portfolio; and
-- Enhance margins on the acquired revenues by transferring the
manufacture of the substantial part of the products into Biokosmes,
where we will also aim to reduce the working capital needed.
The team at PharmaSource is an excellent, professional team,
that have now become part of the Group. Of the two founders, one
left the business as planned in July 2020, the other, Lieke van de
Haterd, has remained and is committed to the business, and has now
taken a Group role as Head of New Product Development.
Outlook
The first half of this year brought very unexpected
circumstances that the world has had to rapidly adapt to. Through
agile and skilled management, Venture Life managed to not only
remain fully operational, but has also produced substantial growth
in this very challenging environment. It is very difficult to
anticipate how the autumn will unfold with COVID-19, but it is
likely there will continue to be widespread disruption arising from
the virus, particularly as we move into winter in the Northern
Hemisphere. We are confident that through the measures taken to
protect its business, Venture Life is in a strong position to
weather any further disruption, and continue to develop its
profitable and cash generative business.
Whilst the market conditions for retailers remains challenging,
we believe Venture Life has the brands, products and expertise to
continue to perform strongly. The Group has been set up to have a
number of products in a range of therapeutic areas, sold in a
number of geographies, in order to minimise risk. The operational
leverage developed by the Group over recent years ensures that the
majority of the gross margin from incremental revenues (organic or
acquired) will flow through to bottom-line profitability and cash
flow. This means we expect profitability will accelerate at a
higher rate than revenues.
We continue to review opportunities for selective earnings
enhancing bolt on acquisitions, and the current economic
environment means that it is likely that the flow of these
increases. We have cash on the balance sheet and access to debt
finance to make a number of smaller, bolt on acquisitions without
any recourse to raise more equity capital at this time. We have a
strong track record of executing these acquisitions and rapidly and
successfully integrating them into the Group.
We have demonstrated the strength and resilience of our business
through the first half of this year through the worst economic
downturn the global economy has seen for decades. Our team, our
customers and our suppliers have all been integral to this. We are
well resourced and capitalised to deal with any continuance of the
COVID-19 pandemic and look forward to the rest of the year with
confidence.
Financial Review
Statement of comprehensive income
The first half of 2020 has proven to be very positive for
Venture Life.
Group revenue for the six-month period was GBP16.9 million, an
increase of 80% on the GBP9.4 million reported for the same period
in 2019. The growth had three main drivers comprising:
a. 15 % from the acquired revenues of GBP1.4 million following
the acquisition of PharmaSource BV on 24(th) January 2020 ;
b. 55 % from higher sales of VLG Brands including through our
new Chinese partner, and new sales arising from HSG products ;
and
c. 10 % from strong growth across our Customer Brands business.
Against this outstanding growth, the business experienced a
small decline of GBP0.1 million in the sales of UK Brands as a
consequence of the lockdown during Q2 2020, which impacted a
portion of our sales that comprise of impulse/on-the-go
purchases.
As a result of these dynamics, the revenues of the VLG Branded
segment of the Group exceeded those of the Customer Brand
segment.
The Group generated gross profit of GBP6.9 million representing
a gross margin of 41%, compared to 37% for the same period in 2019.
This notable improvement was a blend of several factors
including:
a. favourable mix variances arising from the inclusion of
PharmaSource products at a higher average margin ;
b. favourable mix variances arising from the higher portion of
revenues arising from VLG Branded products ; and
c. factory volume/efficiency variances, a clear benefit of the
Group's strategy to increase factory throughput.
Administrative expenses increased in the period to GBP4.6
million from GBP3.6 million in H1 2019. Of this overall increase,
GBP0.2 million related to the inclusion of PharmaSource operations
and GBP0.4 million related to higher non-cash costs of
amortisation, depreciation and share-based payments (which arose
from the PharmaSource acquisition), higher factory capital
investment for growth and new stock option issuances in January
2020. The remaining increase of GBP0.4 million primarily arose due
to one off costs/ changes associated with COVID-19 and some staff
cost increases.
H1 2020 generated a positive adjusted EBITDA of GBP3.5 million,
up five-fold compared to H1 2019 of GBP0.7 million. The profit
after tax was GBP1.6 million (H1 2019: loss of GBP0.4 million).
Profit per share was 1.86p (H1 2019: loss of 0.45p). The adjusted
profit per share was 2.85p compared to an adjusted profit per share
of 0.15p in H1 2019.
The pace of growth of business across the six months inevitably
resulted in a significant increase of funds into working capital in
the amount of GBP2.4 million and as a result, the net cash from
operations was GBP1.0 million in H1 2020 (H1 2019: GBP1.3 million).
Cash used in investing activities amounted to GBP6.6 million (H1
2019 GBP0.4 million) and comprised the majority of the purchase
consideration for the acquisition of PharmaSource BV (GBP5.5
million) plus some significant capital investment into the Italian
factory. Net cash from financing activities was GBP1.0 million (H1
2019 GBP0.5 million) as the Group established another Italian loan
of EUR1.5 million at an attractive interest rate. Overall cashflow
over the period declined by GBP4.6 million (H1 2019 Increase of
GBP1.3 million), reducing net cash from GBP3.4 million to GBP1.6
million net debt, including Finance Leases (or a decline from
GBP6.4 million to GBP0.8 million excluding Finance Leases).
Non-current assets increased by GBP6.0 million in the period,
reflecting the acquisition of the PharmaSource business in January
2020 and the significant investment in factory equipment underway
as part of the plans to expand production capacity well ahead of
the current forecast demand. Total debt increased slightly from
GBP7.5 million to GBP8.2 million and reflects the inclusion of the
additional EUR1.5 million Italian loan from Banco Popolare Milano
srl less on-going repayments.
This has been a strong six-month period for the business, which
has experienced very strong organic growth as well as completed the
acquisition of PharmaSource BV. Operating cashflows have carefully
managed the impact of the increased growth rate, which has
inevitably resulted in a significant flux of funds into working
capital. The balance sheet remains strong and the Group has ample
cash resources and availability to progress the development of its
business, continue to invest in its manufacturing capacity and
deliver on its acquisition strategy.
Unaudited Interim Condensed Consolidated Statement of
Comprehensive Income
For the six months ended 30 June 2020
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2019
Note 2020 2019
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Revenue 4.1 16,897 9,394 20,206
Cost of sales (9,986) (5,891) (12,203)
------------ ------------ -------------
Gross profit 6,911 3,503 8,003
Operating expenses (4,063) (3,217) (6,101)
Amortisation of intangible assets 5 (497) (338) (579)
------------ ------------ -------------
Total administrative expenses (4,560) (3,555) (6,680)
Other income 23 41 163
Operating profit/(loss) before
exceptional items 2,374 (11) 1,486
------------ ------------ -------------
Exceptional items 6 (94) (90) (208)
Operating profit/(loss) 2,280 (101) 1,278
------------ ------------ -------------
Finance costs (165) (17) 84
Profit/(loss) before tax 2,115 (118) 1,362
------------ ------------ -------------
Tax 7 (562) (255) (458)
Profit/(loss) for the period
attributable to the equity shareholders
of the parent 1,553 (374) 904
------------ ------------ -------------
Other comprehensive income/(loss)
which may be subsequently reclassified
to the income statement 8 562 - (300)
Total comprehensive profit/loss
for the period attributable
to equity shareholders of the
parent 2,115 (374) 604
------------ ------------ -------------
Basic profit/(loss) per share
(pence) attributable to equity
shareholders of the parent 9 1.86 (0.45) 1.08
Diluted Basic profit/(loss)
per share (pence) attributable
to equity shareholders of the
parent 9 1.65 (0.45) 1.01
Adjusted profit per share 9 2.85 0.15 2.18
Diluted Adjusted profit per
share 9 2.54 0.14 2.04
Unaudited Interim Condensed Consolidated Statement of Financial
Position
As at 30 June 2020
Note 30 June 30 June 31 December
2020 2019 2019
(Unaudited) (Unaudited) (Audited)
ASSETS GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 11 26,261 20,486 20,722
Property, plant and equipment 4,618 4,394 4,152
30,879 24,880 24,874
------------ ------------ ------------
Current assets
Inventories 7,058 4,326 5,082
Trade and other receivables 10,015 6,345 6,363
Cash and cash equivalents 6,641 10,932 10,710
------------ ------------ ------------
23,714 21,603 22,155
------------ ------------ ------------
TOTAL ASSETS 54,593 46,483 47,029
------------ ------------ ------------
EQUITY & LIABILITIES
Capital and reserves
Share capital 12 251 251 251
Share premium account 12 30,824 30,824 30,824
Merger reserve 12 7,656 7,656 7,656
Convertible bond reserve - - -
Foreign currency translation
reserve 515 252 (47)
Share-based payment reserve 864 678 624
Retained earnings (4,921) (7,886) (6,492)
------------ ------------
Total equity attributable
to equity holders of the
parent 35,189 31,775 32,816
------------ ------------ ------------
Liabilities
Current liabilities
Trade and other payables 8,685 5,364 5,491
Taxation 759 255 218
Interest bearing borrowings
- Bank Loans 792 - 738
Interest bearing borrowings
- Receivables Finance 1,453 1.136 1,184
Interest bearing borrowings
- Leasing Obligations 491 590 512
------------ ------------ ------------
12,180 6,755 8,143
------------ ------------ ------------
Non-current liabilities
Interest bearing borrowings
- Bank Loans 3,586 3,406 2,452
Interest bearing borrowings
- Leasing Obligations 1,914 2,394 2,139
Statutory employment provision 1,034 994 1,058
Deferred tax liability 690 569 421
------------ ------------ ------------
7,224 7,953 6,071
------------ ------------ ------------
Total liabilities 19,404 14,708 14,213
------------ ------------ ------------
TOTAL EQUITY & LIABILITIES 54,593 46,483 47,029
------------ ------------ ------------
Unaudited Interim Condensed Consolidated Statement of Changes in
Equity
As at 30 June 2020
Foreign
Share currency Share-based
Share premium Merger translation payment Retained Total
capital account reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------- ---------- ---------- ----------- ----------- ---------- -----------
Balance at 1
January 2019
(Audited) 251 30,824 7,656 252 609 (7,512) 32,080
---------- ---------- ---------- ----------- ----------- ---------- -----------
Loss for the
period - - - - - (374) (374)
Foreign exchange - - - - - - -
for period
---------- ---------- ---------- ----------- ----------- ---------- -----------
Total
comprehensive
income/(expense) - - - - - (374) (374)
---------- ---------- ---------- ----------- ----------- ---------- -----------
Share options
charge - - - - 69 - 69
Dividends - - - - - - -
---------- ---------- ---------- ----------- ----------- ---------- -----------
Transactions with
Shareholders - - - - 69 - 69
---------- ---------- ---------- ----------- ----------- ---------- -----------
Balance at 30
June 2019
(Unaudited) 251 30,824 7,656 252 678 (7,886) 31,775
---------- ---------- ---------- ----------- ----------- ---------- -----------
Profit for the
period - - - - - 1,278 1,278
Foreign exchange
for period - - - (300) - - (300)
---------- ---------- ---------- ----------- ----------- ---------- -----------
Total
comprehensive
income - - - (300) - 1,278 978
---------- ---------- ---------- ----------- ----------- ---------- -----------
Share options
charge - - - - 62 - 62
Share options
recycling per
IFRS2 (115) 115
Dividend - - - - - - -
---------- ---------- ---------- ----------- ----------- ---------- -----------
Transactions with
Shareholders - - - - (53) 115 62
---------- ---------- ---------- ----------- ----------- ---------- -----------
Balance at 31
December 2019
(Audited) 251 30,824 7,656 (47) 624 (6,492) 32,816
---------- ---------- ---------- ----------- ----------- ---------- -----------
Profit for the
period - - - - - 1,553 1,553
Foreign exchange
for period - - - 562 - - 562
---------- ---------- ---------- ----------- ----------- ---------- -----------
Total
comprehensive
income - - - - - 1,553 2,115
---------- ---------- ---------- ----------- ----------- ---------- -----------
Share options
charge - - - - 240 - 240
Dividends - - - - - - -
---------- ---------- ---------- ----------- ----------- ---------- -----------
Transactions with
Shareholders 240 240
---------- ---------- ---------- ----------- ----------- ---------- -----------
Balance at 30
June 2020
(Unaudited) 251 30,824 7,656 515 864 (4,921) 35,189
---------- ---------- ---------- ----------- ----------- ---------- -----------
Unaudited Interim Condensed Consolidated Statement of Cash
Flows
For the six months ended 30 June 2020
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2020 2019 2019
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Cash flow from operating activities:
Profit/(loss) before tax 2,115 (119) 1,362
Finance cost 165 17 (84)
Operating profit/(loss) 2,280 (102) 1,278
Adjustments for:
- Depreciation of property, plant
and equipment 386 352 786
- Amortisation of intangible assets 497 338 579
- Finance costs (15) (17) 32
- Disposal of capitalised development
costs - - 147
- Share-based payment expense 240 69 131
------------- ------------- -------------
Operating cash flow before movements
in working capital 3,388 641 2,953
Taxation (paid) - - (412)
(Increase) in inventories (1,975) (457) (1,373)
( Increase) in trade and other receivables (3,652) 675 (235)
Increase in trade and other payables 3,194 428 1,507
------------- ------------- -------------
Net cash generated by operating activities 954 1,286 2,441
------------- ------------- -------------
Cash flow from investing activities:
Acquisition of PharmaSource Business (5,523) - -
Purchases of property, plant and
equipment (726) (155) (388)
Development expenditure in respect
of intangible assets (376) (282) (757)
Net cash used by investing activities (6,625) (437) (1,145)
------------- ------------- -------------
Cash flow from financing activities:
Net proceeds from issuance of ordinary
shares - - -
Drawdown in interest-bearing borrowings 1,282 701 696
Leasing obligation repayments (246) (242) (585)
Dividends paid - - -
------------- -------------
Net cash from financing activities 1,036 459 111
------------- ------------- -------------
Net increase in cash and cash equivalents (4,635) 1,308 1,406
Net foreign exchange difference 566 1 (319)
Cash and cash equivalents at beginning
of period 10,710 9,623 9,623
------------- ------------- -------------
Cash and cash equivalents at end
of period 6,641 10,932 10,710
------------- ------------- -------------
Notes to the Unaudited Interim Condensed Consolidated Financial
Statements for the six months ended 30 June 2020
1. Corporate information
The Interim Condensed Consolidated Financial Statements of
Venture Life Group plc and its subsidiaries (collectively, the
Group) for the six months ended 30 June 2020 ("the Interim
Financial Statements") were approved and authorised for issue in
accordance with a resolution of the directors on 22 September
2020.
Venture Life Group plc ("the Company") is domiciled and
incorporated in the United Kingdom, and is a public company whose
shares are publicly traded. The Group's principal activities are
the development, manufacture and distribution of healthcare and
dermatology products.
2. Basis of preparation
The Interim Financial Statements have been prepared in
accordance with IAS 34, 'Interim financial reporting' as adopted by
the European Union. The Interim Financial Statements do not include
all the information and disclosures required in the annual
financial statements, and should be read in conjunction with the
Group's Consolidated Financial Statements for the year ended 31
December 2019 ("the 2019 Consolidated Financial Statements") which
have been prepared in accordance with IFRS as adopted by the
European Union.
The financial information contained in the Interim Financial
Statements, which are unaudited, does not constitute statutory
accounts in accordance with the Companies Act 2006. The financial
information for the year ended 31 December 2019 is extracted from
the statutory accounts for that year which have been delivered to
the Registrar of Companies and on which the auditor issued an
unqualified opinion that did not include an emphasis of matter
reference or statement made under section 498(2) or (3) of the
Companies Act 2006.
3. Accounting policies
The accounting policies adopted in the preparation of the
Interim Financial Statements are consistent with those followed in
the preparation of the 2019 Consolidated Financial Statements.
Foreign currencies
The assets and liabilities of foreign operations are translated
into sterling at exchange rates ruling at the balance sheet date.
Revenues generated and expenses incurred in currencies other than
sterling are translated into sterling at rates approximating to the
exchange rates ruling at the dates of the transactions. Foreign
exchange differences arising on retranslation of assets and
liabilities of foreign operations are recognised directly in the
foreign currency translation reserve.
The sterling/euro exchange rates used in the Interim Financial
Statements and prior reporting periods are as follows:
Six months Six months Year ended
ended ended 31 December
Sterling/euro exchange rates 30 June 2020 30 June 2019 2019
Average exchange rate for
period 1.138 1.140 1.140
Exchange rate at the period
end 1.096 1.140 1.171
4. Segmental Information
Management has determined the operating segments based on the
reports reviewed by the Group Board of Directors (Chief Operating
Decision Maker) that are used to make strategic decisions. The
Board considers the business from a line-of-service perspective and
uses operating profit/(loss) as its profit measure. The operating
profit/(loss) of operating segments is prepared on the same basis
as the Group's accounting operating profit/(loss).
In line with the 2019 Consolidated Financial Statements, the
operations of the Group are segmented as Brands, which includes
sales of healthcare and skin care products under distribution
agreements and direct to UK retailers, and Development and
Manufacturing. The results of the recently acquired PharmaSource
business are included within the Brands segment.
4.1 Segment Revenue and Results
The following is an analysis of the Group's revenue and results
by reportable segment.
Development Consolidated
Brands and Manufacturing Eliminations Group
GBP'000 GBP'000 GBP'000 GBP'000
Six months to 30 June 2020
Revenue
External sales 9,350 7,547 - 16,897
Inter-segment sales - 4,223 (4,223) -
-------- ------------------- ------------- -------------
Total revenue 9,350 11,769 (4,223) 16,897
-------- ------------------- ------------- -------------
Results
Operating profit before
exceptional items and excluding
central administrative costs 2,002 1,915 - 3,917
-------- ------------------- ------------- -------------
Development Consolidated
Brands and Manufacturing Eliminations Group
GBP'000 GBP'000 GBP'000 GBP'000
Six months to 30 June 2019
Revenue
External sales 2,786 6,608 - 9,394
Inter-segment sales - 680 (680) -
-------- ------------------- ------------- -------------
Total revenue 2,786 7,288 (680) 9,394
-------- ------------------- ------------- -------------
Results
Operating profit before
exceptional items and excluding
central administrative costs 109 860 - 969
-------- ------------------- ------------- -------------
Development Consolidated
Brands and Manufacturing Eliminations Group
Year to 31 December 2019 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External sales 6,699 13,507 - 20,206
Inter-segment sales - 2,001 (2,001) -
-------- ------------------- ------------- -------------
Total revenue 6,699 15,508 (2,001) 20,206
-------- ------------------- ------------- -------------
Results
Operating profit before
exceptional items and excluding
central administrative
costs 626 2,827 - 3,453
-------- ------------------- ------------- -------------
The reconciliation of segmental operating profit to the Group's
operating profit/(loss) before exceptional items excluding central
administrative costs is as follows:
Six months Six months Year ended
ended
30 June ended 31 December
2020
(Unaudited) 30 June 2019
2019
(Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Operating profit before exceptional
items and excluding central administrative
costs 3,917 969 3,453
Central administrative costs (1,543) (980) (1,967)
Exceptional expenses (94) (90) (208)
Operating profit/(loss) 2,280 (101) 1,278
Net finance cost (165) (17) (84)
------------ ------------ -------------
Profit/(loss) before tax 2,115 (118) 1,362
------------ ------------ -------------
5. Amortisation of intangible assets
Six months Six months Year ended
ended
30 June ended 31 December
2020
(Unaudited) 30 June 2019
2019
(Unaudited) (Audited)
Amortisation of: GBP'000 GBP'000 GBP'000
Acquired intangible assets (255) (77) (155)
Patents, trademarks and other intangible
assets (82) (75) (177)
Capitalised development costs (160) (186) (246)
------------ ------------ -------------
(497) (338) (579)
------------ ------------ -------------
6. Exceptional items
Six months Six months Year ended
ended
30 June ended 31 December
2020
(Unaudited) 30 June 2019
2019
(Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Costs incurred in acquisitions (94) (90) (208)
Total exceptional items (94) (90) (208)
------------ ------------ -------------
Exceptional items in the period related to fees incurred in the
exploration of acquisition opportunities.
7. Taxation
The Group calculates the income tax expense for the period using
the tax rate that would be applicable to the expected total annual
earnings. The major components of income tax expense in the Interim
Condensed Statement of Comprehensive Income are as follows:
Six months Six months Year ended
ended ended 31 December
30 June 2020 30 June 2019
2019
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Current income tax 562 255 597
Deferred income tax expense related
to origination and reversal of
timing differences - - (139)
-------------- ------------ -------------
Income tax expense recognised
in statement of comprehensive
income 562 255 458
-------------- ------------ -------------
The current income tax expense is based on the profits of the
Development and Manufacturing business based in Italy, the
PharmaSource business in the Netherlands and the UK based
businesses. The UK based businesses on a combined basis have
converted in the current year to profitability and are now able to
begin to utilise the sizeable tax losses that have been generated
in prior years. Consequently there are no UK income tax charges
owing in respect of trading for the first six months to 30 June
2020. (The Group had previously not recognised the deferred tax
asset on losses made by the UK based businesses as it had not been
certain when there would be sufficient taxable profits against
which to offset such losses.)
At the period end the estimated tax losses amounted to
GBP9,842,000 (30 June 2019: GBP9,888,000; 31 December 2019:
GBP10,259,000). This reduction in tax losses at 30(th) June 2020
illustrates the utilisation
8. Other comprehensive income/(expense)
Other comprehensive income/(expense) represents the foreign
exchange difference on the translation of the assets, liabilities
and reserves of Biokosmes and PharmaSource which have functional
currencies of Euros. The movement is shown in the foreign currency
translation reserve between the date of acquisition of Biokosmes,
when the GBP/EUR rate was 1.193 and the balance sheet date rate at
30 June 2020 of 1.096 (at 31 December 2019 of 1.171 and at 30 June
2019 of 1.14) together with the same computation for PharmaSource
BV between the date of acquisition when the GBP/EUR rate was 1.185
and the balance sheet date rate at 30(th) June 2020 of 1.096. The
result is an amount that may subsequently be reclassified to profit
and loss.
9. Earnings per share
Six months Six months Year ended
ended ended 30 December
30 June 2020 30 June 2019
2019
(Unaudited) (Unaudited) (Audited)
Weighted average number of ordinary
shares in issue 83,712,106 83,712,106 83,712,106
(Loss)/Profit attributable to
equity holders of
the Company (GBP'000) 1,553 (374) 604
Basic profit/(loss) per share
(pence) 1.86 (0.45) 1.08
Diluted profit/(loss) per share
(pence) 1.65 (0.45) 1.01
Adjusted profit per share (pence) 2.85 0.15 2.18
Diluted Adjusted profit per share
(pence) 2.54 0.14 2.04
In circumstances where the Basic and Adjusted results per share
attributable to ordinary shareholders are a loss then the
respective diluted figures are identical to the undiluted figures .
This is because the exercise of share options would have the effect
of reducing the loss per ordinary share and is therefore not
dilutive under the terms of IAS 33.
10. Dividends
Amounts recognised as distributions to equity holders in the
period:
Six months Six months Year ended
ended ended 31 December
2019
30 June 2020 30 June 2019 (Audited)
(Unaudited) (Unaudited)
GBP'000 GBP'000 GBP'000
Final dividend - - -
-------------- ------------- -------------
11. Intangible assets
The intangible assets of the group at 30(th) June 2020 were
GBP26.3 million (31 December 2019: GBP20.7 million) comprising
goodwill, development costs, patents and trademarks & customer
relationships. This sum includes GBP5.5 million in respect of the
2020 acquisition of PharmaSource BV (comprising GBP4.1 million
goodwill, GBP1.0 million customer & distributor relationships
and GBP0.4 million trademarks).
At the reporting date the Goodwill generated from the
acquisitions of Biokosmes Srl in March 2014, Periproducts Limited
in March 2016, Dentyl in August 2018 and PharmaSource BV in January
2020 accounted for GBP20.3 million of the intangible assets of the
Group (GBP16.2 million at 31 December 2019). There were no
impairments of goodwill during this time (6 months to June 2019:
GBP Nil).
In January 2020 the Company completed the acquisition of
PharmaSource BV.* The acquisition consideration was EUR6.5 million
(GBP5.7 million), comprising GBP1.6 million for the net assets
(representing GBP1.4 million in customer relationships,
distribution agreements and trademarks and GBP0.2 million in cash
and working capital) and GBP4.1 million as goodwill. The majority
of the acquisition consideration was paid during the first half of
2020 in cash and a small retained sum of GBP0.2 million remains
payable at 30(th) June 2020. The acquisition was funded from the
Company's cash resources supplemented by the additional EUR1.5
million loan from Banco Popolare Milano srl.
PharmaSource markets and sells a range of consumer products for
the treatment of Fungal Nail infections. The Group acquired the
business to expand both its product portfolio and its customer
base. The Group expects that the inclusion of this business 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
PharmaSource for the period from 24(th) January 2020 to 30(th) June
2020.
* The acquisition of the PharmaSource business was achieved by
acquiring Nelie BV, a private company incorporated and operating in
the Netherlands which owned 100% of the share capital of
PharmaSource BV. As at 30(th) June 2020 the Group continues to own
100% of the share capital of Nelie BV and hence 100% of the share
capital of PharmaSource BV.
Acquisition of PharmaSource BV on 24(th) January Fair value
2020
GBP'000s
----------
Assets
----------
Non-current assets
----------
Customer Relations * 465
----------
Distribution Agreements * 575
----------
Trademarks * 417
----------
Current Assets
----------
Inventories 265
----------
Trade Receivables 159
----------
Cash 269
----------
Total assets 2,151
----------
Current liabilities
----------
Trade payables (216)
----------
Non-current liabilities
----------
Deferred tax (277)
----------
Total net assets 1,658
----------
Net Assets acquired 1,658
----------
Goodwill 4,076
----------
Total Consideration 5,734
----------
Satisfied by:
----------
Cash paid at completion 4,198
----------
Cash paid 90 - 120 days after completion 1,325
----------
Cash payable at 180 days after completion 211
-------------------------------------------------- ----------
* Intangible assets identified as part of the PharmaSource BV
acquisition.
Revenue and profit impact of the acquisition
PharmaSource contributed group revenues of GBP1.4 million and
operating profit before exceptional items and management charges of
GBP0.5 million in the period from 24(th) January 2020 to 30(th)
June 2020. If the acquisition had taken place on 1 January 2020,
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 PharmaSource would
have been GBP1.5 million and GBP0.5 million respectively.
Primarily as a result of the acquisition of PharmaSource BV on
24(th) January 2020 the carrying value of the Group's intangible
assets has risen from GBP20.5 million at 30(th) June 2019 to
GBP26.3 million at 30(th) June 2020. GBP20.3 million of this total
comprises Goodwill (GBP16.2 million at 30(th) June 2019)
Development Brands Patents Goodwill Other Total
costs and Trademarks intangible
assets
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ --------- ---------------- ---------- ------------ ----------
Cost or valuation:
------------ --------- ---------------- ---------- ------------ ----------
At 1 January 2019 2,712 1,089 996 16,233 2,819 23,849
------------ --------- ---------------- ---------- ------------ ----------
Additions 235 - 106 - - 341
------------ --------- ---------------- ---------- ------------ ----------
Disposals - - - - - -
------------ --------- ---------------- ---------- ------------ ----------
Foreign exchange (101) - - - (10) (111)
------------ --------- ---------------- ---------- ------------ ----------
At 30 June 2019 2,846 1,089 1,102 16,233 2,809 24,079
------------ --------- ---------------- ---------- ------------ ----------
Additions 637 - - - - 637
------------ --------- ---------------- ---------- ------------ ----------
Disposals (147) - - - (147)
------------ --------- ---------------- ---------- ------------ ----------
Foreign exchange 30 - - - 10 40
------------ --------- ---------------- ---------- ------------ ----------
At 31 December 2019 3,366 1,089 1,102 16,233 2,819 24,609
------------ --------- ---------------- ---------- ------------ ----------
Additions 279 - 504 4,076 1,040 5,899
------------ --------- ---------------- ---------- ------------ ----------
Disposals - - - - -
------------ --------- ---------------- ---------- ------------ ----------
Foreign exchange 79 - 22 - 36 137
------------ --------- ---------------- ---------- ------------ ----------
At 30 June 2020 3,724 1,089 1,628 20,309 3,895 30,645
------------ --------- ---------------- ---------- ------------ ----------
Amortisation: -
------------ --------- ---------------- ---------- ------------ ----------
At 1 January 2019 1,223 - 662 - 1,422 3,307
------------ --------- ---------------- ---------- ------------ ----------
Charge for the period 148 - 69 - 68 285
------------ --------- ---------------- ---------- ------------ ----------
Foreign exchange - - - - - -
------------ --------- ---------------- ---------- ------------ ----------
At 30 June 2019 1,371 - 731 - 1,490 3,592
------------ --------- ---------------- ---------- ------------ ----------
Charge for the period 98 - 108 - 88 294
------------ --------- ---------------- ---------- ------------ ----------
Disposals - - - - - -
------------ --------- ---------------- ---------- ------------ ----------
Foreign exchange - - - - 1 1
------------ --------- ---------------- ---------- ------------ ----------
At 31 December 2019 1,469 - 839 - 1,579 3,887
------------ --------- ---------------- ---------- ------------ ----------
Charge for the period 182 - 92 - 223 497
------------ --------- ---------------- ---------- ------------ ----------
Disposals - - - - - -
------------ --------- ---------------- ---------- ------------ ----------
Foreign exchange - - - - - -
------------ --------- ---------------- ---------- ------------ ----------
At 30 June 2020 1,651 - 931 - 1,802 4,384
------------ --------- ---------------- ---------- ------------ ----------
Carrying amount: -
------------ --------- ---------------- ---------- ------------ ----------
At 31 December 2018 1,489 1,089 334 16,233 1,397 20,542
------------ --------- ---------------- ---------- ------------ ----------
At 31 December 2019 1,897 1,089 263 16,233 1,240 20,722
------------ --------- ---------------- ---------- ------------ ----------
At 30 June 2019 1,475 1,089 371 16,233 1,319 20,487
------------ --------- ---------------- ---------- ------------ ----------
At 30 June 2020 2,073 1,089 697 20,309 2,093 26,261
------------ --------- ---------------- ---------- ------------ ----------
12. Share capital and share premium
Ordinary Ordinary Share Merger
shares of Shares premium reserve
0.3p each
No. GBP'000 GBP'000 GBP'000
Audited at 31 December 2019
and Unaudited at 30 June 2020 83,712,106 251 30,824 7,656
---------- -------- -------- --------
There were no movements in share capital or share premium
between 31 December 2019 and 30 June 2020.
13. Related party transactions
The following transactions with related parties are considered
by the Directors to be significant for the interpretation of the
Interim Condensed Financial Statements for the six-month period to
30 June 2020 and the balances with related parties at 30 June 2020
and 31 December 2019:
Under the terms of the Share Purchase Agreement dated 28
November 2013 and signed between the Company and the vendors of
Biokosmes, one of whom was Gianluca Braguti, the vendors agreed to
indemnify the Company in full for any net liability arising from
certain litigation cases which had not settled at the time of
completion of the acquisition on 27 March 2014. At the period end
the amount due to the Company under the indemnity totalled
EUR55,815, of which Gianluca Braguti's liability is EUR55,815. All
litigation cases have now been settled.
Key transactions with other related parties
Braguts' Real Estate Srl (formally known as Biokosmes
Immobiliare Srl), a company 100% owned by Gianluca Braguti a
director and shareholder of the Group provided property lease
services to the Development and Manufacturing business totalling
EUR230,000 in the six months to 30 June 2020 (EUR230,000 in the six
months to 30 June 2019). At 30 June 2020, the Group owed Braguts'
Real Estate Srl EUR115,000 (EUR297,000 at 31 December 2019).
14. Financial instruments
Set out below is an overview of financial instruments held by
the Group as at:
30 June 2020 30 June 2019 31 December 2018
----------------------------- -----------------------------
Loans and Total financial Loans and Total financial Loans and Total financial
receivables assets receivables assets receivables assets
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial assets:
Trade and other
receivables
(a) 10,015 10,015 6,345 6,345 6,868 6,868
Cash and cash
equivalents 6,641 6,641 10,932 10,932 9,623 9,623
Total 16,656 16,656 17,277 17,277 16,491 16,491
------------ --------------- ------------ --------------- ------------ ---------------
30 June 2020 30 June 2019 31 December 2018
--------------------------- --------------------------- ---------------------------
Liabilities Total Liabilities Total Liabilities Total
(amortised financial (amortised financial (amortised financial
cost) liabilities cost) liabilities cost) liabilities
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial
liabilities:
Trade and other
payables (b) 9,444 9,444 5,636 5,636 5,107 5,107
Leasing
obligations 2,405 2,405 2,984 2,984 3,226 3,226
Interest
bearing
debt 5,831 5,831 4,543 4,543 3,842 3,842
----------- -------------- ----------- -------------- ----------- --------------
Total 17,680 17,680 13,162 13,162 12,175 12,175
----------- -------------- ----------- -------------- ----------- --------------
(a) Trade and other receivables excludes prepayments
(b) Trade and other payables excludes deferred revenue
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IR FLFVRATIVFII
(END) Dow Jones Newswires
September 24, 2020 02:00 ET (06:00 GMT)
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