Trading Update

RNS Number : 9916J

Venture Life Group PLC

23 December 2015

 

VENTURE LIFE GROUP PLC

("Venture Life" or the "Company" or the "Group")

Partnering deal extension in China and trading update

Bracknell, UK - 23 December 2015: Venture Life Group plc (AIM: VLG), the international consumer healthcare group addressing the self-care needs of the ageing population, announces an extension to its existing exclusive partnering deal with Gialen Group Co. Ltd ("Gialen") in China and a trading update ahead of the announcement of the Group's final results for the year ending 31 December 2015.

Partner deal extension in China

On 26 January 2015, Venture Life announced a 30 year exclusive distribution deal with Gialen to launch a range of 15 skincare products under the LubattiÔ Classic brand (the "Classic Range") across Gialen's c. 1,300 stores in China.  The minimum purchase obligations for Gialen for the Classic Range are worth RMB 52.8m (£5.5m at the current exchange rate) in sales for Venture Life over the first five years following product registration. The Group has now signed an addendum to this agreement, covering a range of five new skincare products under the brand name Lubatti 21Ô. These products are now ready to enter Phase 2 registration with the China Food and Drug Administration ("CFDA"), with the subsequent launch in China expected to be in late 2016.

The seven Classic Range products that had received registration approval from the CFDA by the end of September 2015 have now been manufactured at the Group's facility in Italy, and delivered to China, with payment made in accordance with agreed terms. The retail launch of these products in China is due to take place this week.

As at the time of the Interim Results announcement on 29 September 2015, the remaining eight Classic Range products were still in registration, with the expectation that these products would be shipped to China by the end of 2015 or early in 2016.  Gialen is managing the registration process, and have confirmed to the Group that six of these products have recently completed registration.  These six products are now in production and are expected to be shipped to China in Q1 2016.  The remaining two products are still in the registration process, although approval is expected shortly, and consequently delivery is also anticipated in 2016, with some of the budgeted 2015 revenue consequently now expected to be recognised in 2016.

As a result, the Group's revenues for the year to 31 December 2015 are expected to be approximately £9m, an increase of over 10% (on a like-for-like constant currency basis) compared with 2014 financial year. The Group's costs have been lower than expected during 2015 and management anticipates that the Group's post-tax earnings will remain in line with market expectations. The Group expects to announce its final results in March 2016.

Production

The Group's production facilities are currently only approximately 50% utilised, so the Group is focused on generating more revenues through products that can be produced internally, where incremental margins will be higher as fixed production costs are already covered.

Product Development

Strong progress has been made on new product development during 2015 with the new branded food supplement for cholesterol reduction in a convenient 'once a day' liquid sachet now completed. The new product format has been approved for distribution by the brand owner and is currently being introduced by the Group to potential distribution partners.

The development of four new products for the new women's health range (branded vonalei™) has also been completed this year, and with the first partner already in place we will be reporting first revenues from this range in 2015.

Prospects

The prospects for the Group in 2016 and beyond remain good; the order book for Q1 2016 is already ahead of revenues for the same period in 2015, even before taking into account the revenues from China that are expected to move into 2016 from 2015.  The launch of Original Bioscalin in India by our partner Unichem is also expected in 2016 (subject to registration), and is one of a number of launches we anticipate during the year. The Group is confident of its continued growth and financial prospects into 2016 and beyond.

For further information please contact:

Venture Life Group PLC

Jerry Randall, Chief Executive Officer                                                                    [phone]

James Hunter, Chief Financial Officer                                                   

Panmure Gordon (UK) Limited (Nominated Adviser and Broker)                             
Freddy Crossley                                                                                                               [phone]

Peter Steel

Duncan Monteith                                                                                                           
Corporate Finance

Tom Salvesen
Corporate Broking                                                                                  

Square1 Consulting

David Bick

Brian Alexander                                                                                                                [phone]

About Venture Life

Venture Life is an international consumer self-care company focused on developing, manufacturing and commercialising products for the ageing population. The Group's product range and pipeline currently includes food supplements for lowering cholesterol and maintaining brain function, dermo-cosmetics for addressing the signs of ageing, and medical devices for improving minor aches and pains, dry eyes and itchy skin. The products, which typically are recommended by pharmacists or healthcare practitioners, are available primarily through pharmacies supplied by the Group's international distribution partners.

Through its manufacturing company, Biokosmes, the Group also provides development and manufacturing services to companies in the medical devices and cosmetic sectors.

The Group's own branded products are currently sold or partnered in over 40 countries and currently include:

·     food supplements to maintain brain function and memory;

·     dermo-cosmetics for addressing the signs of skin ageing and hair loss, and

·     medical devices for improving conditions such as minor aches and pains, dry eyes and itchy skin.

The Company has a healthy development pipeline including products in areas such as diabetes, cardiovascular health, obesity, cognitive function and skin ageing. Products coming from the pipeline will be expected to have intellectual property protection and be supported by independent clinical evidence of efficacy.

About Gialen

Gialen was founded in 2005 and is headquartered in Guangzhou, China. Gialen is one of the largest cosmetics retail chains in China with over 1,300 stores and 300,000 customers daily.

Gialen sells an extensive range of products, listing some of the world's best known skincare, cosmetics and personal-care brands including L'Oreal, Shiseido, Olay and Nivea.

 

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