Venture Life Group (LSE:VLG) — Interim Results

0:01 Good afternoon, and welcome to the Venture Life Group PLC Interim Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO,

0:32 Gerry Randall. Good afternoon to you. Good afternoon. Thank you, everybody, for joining us at our interim results presentation. I'm Gerry Randall, CEO of the business. On my right, I've got Danny Wells, who's our CFO. And on my left, I've got Kate Beige. Kate was one of the cofounders of the health and health business that we acquired last year. Kate's now gonna be joining us on the board of VENTURE LIFE from the November 1 and is in charge of that marketing and innovation, and Kate's gonna be talking to you about the brands and the marketing initiatives we have a bit later. So we're very happy to present our interim results. That's for the period to the end of June twenty twenty five. I'm gonna take you through a few of the highlights, both financial and operational. Danny is going to then go into a little bit more detail on the financials.

1:19 And as I Kate will then talk a bit more about the key brands, what we've been doing and what to expect in the future periods. So just to be clear, these revenues that you see in these numbers relate to our continuing operations. So in July, we disposed of our CDMO business and some minor brands. That's the Biocosmos business in Italy, Rob Corbyn business in Sweden, some minor brands, just top two east, microclear that some of you may recognize. And we're also in the process of divesting of our oral care brands. Those are also excluded from the figures that you see here in continuing operations. So on a like for like basis, we had just over 12% growth in revenue. On a reported basis, 43% because we acquired Health and Her towards the back end of 2024, and so there wasn't much of their revenue in our business in 2024, but we've got a full contribution in 2025.

2:11 But adjusting for that, on a percent like for like basis, 12% organic growth. Gross margin increased by nearly one percentage point. Adjusted EBITDA up to 1,800,000. Free cash flow before exceptional was similar to last year, but Danny will talk through why that is. And having disposed of our CDMO operations in July, which is post the end of this period, we received about €65,000,000 in cash. We paid down the drawn facility that we had on our RCF at the moment. We still retain the facility. And again, we'll talk about that later. But at the end of September, so as of yesterday, we were settled net cash of £34,000,000 So as I completed the CDMO divestment. We are actively marketing the old care brands for sale. We've got some new board appointments. As I mentioned earlier, Kate is gonna be joining us on board from the November 1.

3:01 And we've also appointed a gentleman called Peter Jackson, who'll be our chief digital and technology officer, joining us from the December 1. And that's really integral to our strategy to have integrated digital and AI capabilities. Final thing really on post period end, we've now integrated the vet the health and her team into VENTURE LIFE. So the teams are all now merged together with with good verticals. We've got also the the other cofounder for Health and Her, Jervais Vandis, who's not with us today, but Jervais is now in charge of strategic customer relationships, and she'll be helping to grow this forward with our key retailers, particularly the likes of Boots, Superdrug S, Watson and CVS in The US. So now I'll hand over to Dani, who'll give you a bit more detail on the financial headlines.

3:50 So as Jerry said, GROUP revenues increased in the first half this year at 43% to 15,400,000. That, of course, includes the new contribution from the recently acquired health and home business at the end of last year. We acquired that on eighth of November last year. That contributed 4,000,000 of revenues to the first six months of this year. So on a pro form a basis, the organic growth of the business was 12 and a half percent, and and that growth, importantly, is coming from both our UK consumer brands business, but also our international partners as well, broadly 13% growth in The UK, 11% growth on the international business. Gross profit, the group, was up 49.9% on the revenue growth, up to 6,600,000 versus 4,400,000 in gross profit in the previous year, and a gross margin improvement, with that, up to 43.1% versus 41.2% the year before. Of course, again, inclusion of Health and Her in the prior year numbers to show that on a pro form a basis, important to understand. And the the marginality of those products is around 10 to 12%, percentage points higher than the sort of blended average of the VENTURE LIFE other brands. So that's had an impact on pushing up our reported margins on a pro form a basis, broadly in line with where we were this time last year.

5:06 Marketing costs, you'll have heard us talk a lot over the last year, eighteen months around our investment in marketing, strategic investments, raise brand awareness, track the right promotions in store, drive the online sales. And, that's gone up to 10 and a half percent in the first half of this year versus 5.6% for the same six months last year. But important to understand, again, is that that 10 and a half percent is against overall group revenues. Now part of our revenues are not supported by marketing costs. So for example, our international partners, some distributors, and some of our oncology support products, we don't put direct marketing into, those channels. So when you strip that out, the revenue, just look at marketing against the brands we're supporting. It's around 14 and a half percent of the revenues from those brands is going back into marketing activities to drive that strong top line growth. And, again, just to put that on a pro form a basis, that 14 and a half percent compares to around 10% last year because the Health and Her business were already supporting those brands quite heavily compared, relatively speaking, to the other VENTURE LIFE brands. So on a pro form a basis, marketing investment is about 10% last year going up to 14 and a half percent this year. And, really, that extra four and a half percent against the pro form a, that's the initial investment we're making in the other venture life brands, Balance, Active, LIFE, and we'll talk later on in the slides around the the growth we're getting and the returns we're seeing from that and still early days.

6:32 Adjusted EBITDA was up 32.6% to 1,800,000 in the first half against reported 1,400,000 in the year before. Adjusted EBITDA margin slightly down to 11.6% in the first half against 12.6 last year, and that's really reflecting the increase in the marketing spend we're currently putting in to drive that top line growth. There's always going to be a lag effect on that investment because we're putting in efforts to raise awareness of our brands. That's not an immediate impact. It's a gradual piece of work to increase the sellout rate in our stores, and we've got a lot of focus as a board and as a management team on how we ensure that we maximize that sellout across all of our brands in both UK and internationally over the coming years. So that's an area we're investing in now. It's had a drag on percentage margins in the first half, it will help us deliver stronger marginality going forward as we get that revenue acceleration continue to come through at higher gross margin accretion as well on the brands we're focused on growing.

7:28 Free cash flow. Jerry mentioned earlier that it was about stable in terms of, positioning versus the first half of last year. But on a reported basis, free cash flow was down to 1,500,000,000 for the first half against 2,100,000 reported in the prior year. We had around 700,000 cash exceptional costs that went out in the first half of the year. So as a lot of you will know, we're already we're implementing rather an ERP system right now. Microsoft Dynamics, we've been investing in that since the end of last year. We're on target to go live with that at the end of this year, but that's been a big investment. And so that cash exceptionals going out of the business in the first half, that's what's driven down the reported free cash flow to 1.5 against the prior. Otherwise, it would have been more stable.

8:14 Drawn funds against the revolving credit facility. So we paid those down in full on the August 7. So as we sit here today, we have no debt in the business. We had at June 30, we still had the RCF facility in place, and we had drawn funds against it, but we received the proceeds on the divestment of our manufacturing operations and noncore brands back in, end of July. So a couple of weeks later, we paid down the debt. So as we sit here today, we're sitting on net cash position of about 34,000,000. And it's important to highlight that we've still got that RCF facility. So that gives us access to 30,000,000 of funds, subject to 2.5 times EBITDA on the trading business for whatever we want to acquire. We'll talk about m and a later. Plus, we've got a further 20,000,000 accordion facility. So there's 20 and the 30. We've got 50 of funding access available to us, plus 34 cash in bank. So we're sitting on a good $8,485,000,000 of cash firepower for our acquisition plans, and we'll talk more about that shortly.

9:12 I think I've already mentioned about health and hair, so we'll skip on to the next slide. I'll provide an overview of the brands.

9:20 Thanks, Ray. So just so later on in the deck, Kate will talk in more detail to the performance of the individual brands, the drivers within those. But just as an overarching view, so as I said at the start, the brands grew by 12 and a half percent on revenues profile versus this time last year. The women's intimate health and women's health parts of the business grew most strongly. So women's intimate health, that includes our balanced active brand. That grew by 24% in the first half. And, again, that was driven by, UK and international, combined. So The UK business was up 13%, really reflecting new product development, increased distribution in the stores, rate of sale improvements because of our focus on sellout and and, our rate of sale. And then in the international business for women's health, we launched into first orders into a new strategic partner, COOPER Consumer Health. We've launched their bacterial vaginosis product under COOPER's brand, and but that's part of the line for women's intimate health.

10:19 Hormone health, that is the brand we acquired at the end of last year. It's the Health and Her and now Health and Him brand, which has been launched since the acquisition. Those revenues were up 38% year on year on a pro form a basis. That represents about 35% on the Health and Her brands, and the the balance of growth coming from the newly launched Health and Him product, which launched at the very end of last year and has some incremental revenues this year. Energy management, as you've seen and read in the r and f, some of you, they're down year on year after a year after three years of being growing 30% year on year.

10:54 We had an issue with NHS at the start of the year where NHS were going through a reset of their ordering platform. During that transition for six weeks, we were taken off that system as an error. It wasn't an intentional error, and it caused us to lose meaningful revenues in the first part of the year. We've since rectified that during q one, but its revenues are unable to recover through that channel as the demand would have gone to other products and people who needed it. At that time, we sweep some of it through our GlucoGel product, but that has had a negative impact on the first half of the year, which we weren't expecting on the LIFE brand. So as we look at the year to go and our future plans for LIFE, we're very confident of recovering that position strongly and getting back to the double digit growth levels that we've seen over the last three years.

11:41 And we've got a huge level of new product development pipeline coming through, and Kate might touch on some of that later. Ear, nose, and throat. Overall, as a division, it was down 11%. But within The UK, there's two parts to this. It's around 6,000,000 in revenues on the year old brand, 3,000,000 in The UK broadly, 3,000,000 internationally. In The UK, the brand was up 15% year on year, having grown around around 8% over the last three years. So real step up in our UK growth, again, driven by, the focus on gaining new distribution, raising rates of sale, getting the right position in the stores. Internationally, where the product is partnered, we don't control the timing of those orders, and those order patterns can be heavily skewed against h one, h two revenues. So what we've seen is that lower orders in the first half of this year against the same time last year, but we've got great visibility over the second half of the year. So we expect those were covered revenues internationally to cover recover significantly in the second half, and we'll see high single digit growth overall from the ear old brands by the end of this year when you combine UK and international.

12:45 And finally, oncology support, coming off a low base. These are our old fully partnered products, POMI T and GelClair. Revenues in the first half of last year were very small. Again, order patterns are driven by our customers. And they with the revenues here, it went from about 100 to 300. So the 200% growth is off a very low base.

13:09 Thanks, Danny. So let's just refresh our business model and our strategy. Clearly, what's changed from where we were a year ago is that all of our manufacturing development work is now external. So we still have a lot of business with the BioCosmos and the Rock And Corbin facilities that we divested off. We have a long term ten year manufacturing agreement with them, but also with the other facilities within the industrial group that acquired them. And they have five other facilities focused quite heavily on food supplements and probiotics, so we're expecting to do more work with them. In fact, they've already started making some of our LIFE SHOT products. So our development and manufacturing partners, they're still the same ones effectively you had before, but they're external. But we're still working closely with the team that used to be part of VENTURE LIFE GROUP.

14:01 And our strategy is really into those key pillars you see on the left hand side of the page. So in no particular order, but acquiring and transforming core brands that have a clear runway for profitable growth. The divestment of the CDMO business and the All Care brands, along with our revolving credit facility, gives us significant firepower to acquire interesting assets or businesses into the group. We're looking for businesses that will have good marginality, improve our overall gross and EBITDA margins and be complementary, cash refilling, white space filling products or brands for us. And we'll keep you updated as we each time we report, but we have a a good active program of of assets to look at. We recruited our head of M and A. He joined us in July, he's now a dedicated resource to take that forward.

14:50 So we have a number one brand mindset. So a number of our products are number one in the space already or number two, it's really important that we have a brand mindset that we have a number one position with our products. And that helps us to both grow the category and to grow that segment, but also to penetrate more into that segment. Omnichannel is really important for us, and that means that we have an omnichannel go to market strategy where shoppers shop. So we have to be where the shopper will shop. And that could be in high street and grocery, could be in pharmacy, e commerce, or with international partners. So it's important we're in all those places. And the biggest shopper for our products is is sort of mom who shops for the children herself, her husband, rest of the family, but important that we have our products in the locations where the shoppers are shopping. Next pillar is to have integrated digital capabilities and advanced AI. That's really important. And I mentioned earlier the appointment of Peter Jackson to our board later this year will bring that skill set of aligning IT strategy with our business strategy and helping us to power growth using those integrated digital capabilities.

15:55 And finally, the retaining our core entrepreneurial competencies. That's what's brought us to this point. It's about agility. It's about seeing the opportunity, following the opportunity, being fleet of foot. And we will continue to do that with the way our teams are organized, the way people are given responsibility and accountability to grow their parts of the business. So what we've done, really, is to simplify our business and become the partner of choice for proactive, healthy, longevity, or health span. Health span is the period of your life where you live a full, healthy life as opposed to a lifespan which is, let's say, the entire length of your life. Proactive health and longevity is about giving our consumers products that help them to extend that healthy lifespan that they have.

16:40 So what we've done is we've evolved into a purely brand platform that brings higher margins into the business and brand equity, of course. We can invest in our power brands with the funds that we've raised and the cash flow that we develop. We're going to innovate, and Kate now heads up innovation in the business because that was a part of the business, part of the sort of development that was dealt with in BioCosmos before we disposed of it. And we're looking to grow in key markets, which is, for us, The UK, where circa twothree of our business is now, The EU and The US.

17:13 As I mentioned, these are our five strategic pillars. I won't run through these again, but it's we have a a project within the business that has the key sort of senior management and middle management in driving each of these strategic pillars along with ninety day segments and then fourteen day sprints in those ninety day segments to develop each of these pillars and to drive the business forward. So prevention and treatment products, which improve health span, is our focus, and we want to help the health span of all these people you see here. And in doing so, develop and organically grow and innovate within our current brands and products, but also to buy products and assets that have a strong runway for profitable growth.

17:58 In terms of corporate development, we've mentioned a number of these things already, but we've looked to simplify our structures as we go forward. Obviously, divesting of our CDMO businesses brings some simplification. We've been streamlining the number of entities we have within the business, and that helps to simplify reporting and complexity in operations. The new ERP system, which Danny mentioned, will be completed by the end of this year, which has been an enormous project and, you know, real piece of work for our team, obviously, in finance but across all the business, and that's gonna deliver real value and improvements for us. The rest of the CDMO, the oral care divestment is underway. We expect to complete that by the end of the year. We've retained our RCF. We've strengthened the board through some executive appointments. So we also have a new full time company secretary, Louise McCarthy, who's joined us.

18:47 And the management team also has been strengthened with a number of new appointments, particularly in areas where they were dealt with, within the Italian business that we've divested of. So particularly procurement, also areas of digital marketing, m and a, sales, commercial, and those functions, and regulatory, also those functions will be bolstered and invested in. So it's a period for us where we're obviously got significant funds. We're investing in growth not only in marketing and A and P, also innovation and also in teams to make sure we can deliver these aspirations that we have. And finally, on M and A strategy, we're looking to buy in complementary categories or adjacency. So women's health, men's health is key categories for us. We see a lot of white space in the area. We're we're certainly a leader in the, you know, the menopause space for the health and the business, and we're broadening that out to to wide areas. But there's lots of opportunity, where we think we can add additional products or additional businesses where we can use our skill set, our capabilities, whether it be in distribution, innovation, marketing, digital marketing, so forth to grow the business forward.

19:52 We're looking for acquisitions which will enhance our margins both at a gross level and at an EBITDA level, sensible pricing, and asset purchases would be preferred. We've been working on a long list. What what we do is to look in the space. We walk around the stores. We look at other products. We look at other businesses, and we identify products, areas, ideas that could be interesting for us, analyze those. And then we look to start interacting with those companies and targets to see whether there's an interest in a transaction. So simply watch this space. We'll be progressing that going forward, and we're looking forward to bringing some exciting news on that as we go forward. And now I'm going to hand over to Kate, who's our Head of Marketing Innovation, to talk through the key brands and what's been happening in the first half and what to look out for in the future. Thank you, Gerry.

20:44 Yes. So starting with our hormonal health portfolio, which encompasses, Health and Her and Health and Him. Some fantastic growth that we're really pleased with this year. And first half, so 38% growth across the across the board, and that includes 35% growth on on the Health and Her brand. Health and Him, just as a reminder, was only launched in October 2024. A lot of this growth is coming from distribution, point gains. So, the CVS expansion, in in in April that came about added another 15,000 distribution points. So really exciting expansion in that particular retailer. But we've also been expanding distribution in The UK through both core brands as core range, has extended the distribution thanks to organic growth, but also a new range of multivitamins under the Health and Her brand, including two quite breakthrough innovations, which support women taking exogenous hormones.

21:41 The other interesting development on marketing side of of things, marketing highlights includes some advertisements next to the Oprah Winfrey documentary and also expanding marketing levers into, YouTube and into also, menopause podcasts and testing these. So and get some nice growth out of those particular levers. Looking into half two, we continue with this theme of innovation and distribution growth. Thanks to our launch of new reproductive health range. This encompasses fertility and conception for men and women in both brands, a pregnancy supplement and new mom's supplements, and vegan omega. We're also we've also already launched a prostate support product called Prostacardin, the Health and Him brand.

22:32 And we've also we're also looking to launch a intimate spy range very shortly too. And this will be accompanied by national health tracker that we have in our app, which will, again, support innovation and insights across the whole women's health portfolio within VENTURE LIFE GROUP. Other innovate sorry. Other marketing activities includes a mark sponsorship of a medical documentary in The US, which we're also potentially airing in The UK, and also a a lot of activity in The US trying to further grow brand awareness out there and support CVS in the in the activities of the brand in that in that particular market. Moving on to Balance Active.

23:20 Again, some really fantastic growth in this brand in the first half, innovation being a theme again. We had some fantastic, new products that were launched in the last couple of years that are really starting to come into their own with distribution expansions, and they include the thrush product and also the intimate soothing gel sorry, intimate soothing cream. And that's really driving fantastic growth across our grocery channel and online as well through optimized marketing and and doing some further digital marketing in that channel. We have also entered into some menopause fixtures with, two of our customers, with some mixed results and and a relatively small test in those in those markets at the moment. So we're we're assessing, the effectiveness of that strategy at the moment, and looking to see how that will evolve over the coming year.

24:08 In the second half, we continue to focus very much on the innovation and and looking at building out that that pipeline over the next few years. We can see that the brand has, the capability to stretch into new therapeutic areas. And, we're also building out the website to ensure that we have the ecommerce elements on the website, capitalizing on the great traffic that we have coming to the symptom tool on the Balance Active website, but also starting to gather a a large database there and do some further digital marketing activities. In addition to that, we also have a new retailer coming on board in the next couple in the next few months. So really looking forward to an extension distribution points in that retailer. And, yeah, that that should really bolster the distribution across the board.

24:56 Moving on to our energy portfolio, which encompasses, LIFE and Glucogel. So some really good growth, on the online channels here. As, Danny said, we had an issue on the, on the NHS platform earlier on in the year, but some of that has been regained through the online channel. Glucogel has also launched onto Amazon with some fantastic growth. We see this as a as a really good supportive brand, particularly used by carers of type one diabetics, and that's growing really, really well. And we're continuing this theme of expanding our digital marketing presence, testing, and seeing which methods are working best across the brands. We've seen some really good results with with those activities so far in the year. Finally, we're also working out the perfect placement of this brand within our retail customers, and there's some very exciting results of early tests in terms of placing this product in the in the supplement aisle. So we'll be looking to expand that with our with our customers going forward.

25:59 In the second half, we are really trying to double down on our health care professional recommendation, capitalizing on this nice recommendation and diabetic nurses and GPs having it having access to it to prescribe, but also to recommend. And so we're working on a on a large marketing campaign in in that area. Also, leveraging that digital marketing capability from the health and her team and expanding out some of the nonpaid channels, particularly email marketing database growth to get, obviously, some of those nonpaid free free opportunities to connect and and promote the products to to our customers.

26:38 And finally, continuing to work on our shopper strategy and working with retail to ensure that those four piece of for for the brand are working really hard for us in store. Finally, looking at EARL. Again, as Danny mentioned, some lovely growth here in The UK in the first half. This is thanks to, again, a running theme of some fantastic innovation that has been launched in prior years, which is having distribution extensions, and this includes our baby ear roll and the almond oil and aftercare products. And we've seen increase of 1,400 distribution points. Also working on this placement strategy again with retail, and and we've seen some some really nice organic growth within within one retail in particular.

27:27 And we're also working very closely with retailers to support the shop and with the education itself in order to to we've we've successfully done that with promotions, and we're looking to roll that out as a permanent fixture, and and collaborate with our customers to really lead the way on that shopper marketing piece. And looking at the second half, we again have another new listing into Holland and Barrett's in quarter four, which is adding some significant distribution points and also expansion into the hero products in Morrisons. So, again, really great growth there with our with our gross grocers and and health and beauty customers. We're also integrating some further health care professional messaging and communication education directly to our consumers and also looking at the, as I said, all around support for the education of Fixture to to help shoppers navigate the the shelf inside inside the the retailers that we're working with.

28:31 Great. Thanks very much, Kate. So what have we been doing, you know, for the last six to nine months? Well, we've we've now presented Venture Life with a capital light structure. We we don't have to invest anymore in the CDMO development operations. So that cash that we generate and we have, we can invest into the products, the brands and growth of those. We're a brand focused business. That's with higher margins, higher price points. And that number one brand mindset, making sure that we can grow the categories, grow the products and grow share of the market that we're in. Data driven insight is really important. And one of the things that's really impressive about the health and health business was the depth of research data that that business had. And that data helps to design products and innovation will fall out of that research on a regular basis. So we're very keen to get that across all of our brands, all of our products, and make sure we use that insight to drive our relationships with strategic customers, help them to grow their categories, to grow their footprint and look at their stores and look at how they can best serve their customers. The omnichannel approach, as we've mentioned, that's really important. We're selling in all those channels now in The UK.

29:34 It's important to remain there and make sure we're targeting shoppers there. The digital integration is very important. Pure play consumer health care, retaining our entrepreneurial skill set, our entrepreneurial mindset, and having a core geographic focus. So really just to finish up our presentation, we're now focused on the higher margin CHC landscape, which has, historic exit multiples of 14 to 15x EBITDA. We've got strong net cash position, 34,000,000

30:03 now. We'll also generate further cash from the divestment of our oral care business. We'll be generating cash as a business going forward. So good firepower in order to undertake the organic growth through A and P of our existing brands, but also to invest in some interesting acquisitions. And what we've seen in the first half of year is investment in increased A and P, as Dani has explained, has delivered good growth across our core brands, and we see that continuing. We think there's a lot of headroom across each of those brands, both in terms of, you know, the positioning and the and the share within the market, but also growing that market and growing people into the brands. The RCF, is there. It's a 30,000,000 committed, 20,000,000, accordion on top. And, again, we will look to use that through, our acquisition pipeline when we've used up the cash, but we'll keep any net debt to a sensible leverage of around 1x.

30:55 And we think we can significantly scale the business both organically and acquisitively with those funds. We now have a clear strategic focus. We have excellent development and manufacturing partners with long term manufacturing agreements, and we expect to develop a lot of new products and new business with them. And we will continue to invest in organic growth and make those acquisitions. So and that's the end of our sort of formal presentation. We're we're excited about the future. We've got a great team that are in place. We've had some, you know, good new points to the board. We strengthened that. We strengthened our senior management team. We brought in some great talent from outside of the business as well, and that's really helped us to upscale our capabilities and get us ready for this substantial growth that we're looking forward to. So with that, I'm going to finish the presentation. We have received a few questions, and I'm very happy for us to to go through and answer those now.

31:49 I'll take the first one, which comes from Peter W, who says, given the apparent low valuation, do you think the company is vulnerable to a takeover bid? Well, Peter, it's a a theme of a couple of questions. And we spent the last two days, with our institutional shareholders just updating on the business, and they're they're all very happy with that. And, yes, it is a low valuation. It's probably endemic of the small cap market and the market in general, lower liquidity. And we disposed of our CDMO business for 10 to 11x historic EBITDA. So and the CDMO businesses are generally lower rated than branded businesses. So we know, at the moment, based on the new Cavendish figures or our new financial year end in May, we're trading at just below 4x EBITDA, plus the cash.

32:38 So that is very low. And we know for the sector in terms of transactional multiples, they're a lot higher. So to answer your question about takeover bid, I think we have a very supportive and strong shareholder base. And I think they would not allow us to be vulnerable to a silly takeover bid. So we're very confident that our supportive shareholders will be behind us in that. Second question from Peter W is, assuming the directors believe the company is too cheap, will there be probable director buying? Well, obviously, I can't I can't, forecast out things that might happen regarding director buying. But I think, Peter, if you look back earlier in the year, the board substantially invested in the shares of the company, bought a lot of stock. I'm a significant shareholder myself already, and we bought more. So, yeah, we believe in the future of the company, and so we support that entirely.

33:32 The next question I'm gonna, pass over to Danny, which is from, Jeff Jay. It says profit margins are currently rather modest. How are you planning to improve this? What gives you the confidence that this will be successful?

33:45 Thanks, Terry. Yeah. So thanks, Jeff, your question. I'm not clear which level of of the p and l you're asking about on profitability, so I'll try and give you a wide covering answer and, of course, follow-up with me afterwards if I if I don't answer your question directly. But I'll just tackle the bottom line profitability to begin with at PBT level. Of course, what we've got is a a large exceptional cost going through the p and l to to invest in the implementation of the RP systems. There's a million pound of exceptionals in the first half of the year. They're not nonrecurring. And we've also got finance costs going through the p and l as we still have the debt up until June 30, so it's 600 k of finance costs. So there's 1,600,000 of cost there, which is nonrecurring going forward. We no longer have the debt. The exceptionals are winding down because of ERP implementations going in place. But I'll have to assume your question was more led to EBITDA given that's what we were talking about on the slide. So, yeah, I think first thing to point out is that the first half of the business historically has always been significantly lower margin than the full year of the business. The business has historically been very weighted towards second half of the year, 40% split in in favor of that second half, and that's where the international part of our business has much stronger revenue in in h two.

35:00 And what that does is it drives the leverage through our p and l because we've got incremental revenue, incremental gross profit coming through, but the fixed cost is there throughout the year. So you get a significantly stronger flow through to EBITDA. So at an EBITDA level, we would be 23% margins in 2024. So the 11.6% you've seen for the first half of this year really isn't representative of the annual view of the business. But I will touch base on the word seasonality because you'll have seen we've announced a year end extension to up to May 31, so we're changing our year end now. Really, just to explain some of rationale for that because it's linked to the question and the explanation of this answer is that, we have historically had our largest revenues by far in q four of the calendar year every year since I've been involved in the business. And what we see is that the largest revenue is actually in December each year, which is also the shortest month for operating, less time to book logistics, book couriers, more expensive to do all of this. So you actually get a big rush to try and deliver the revenues in that time frame, and that's not helpful when the biggest part of our revenues are linked to our retailers restocking for the New Year. So a lot of our retail business, brick and mortar, this is related to less so on our DTC business, which isn't affected by stocking, but we see them restocking for New Year, New Year, health promotions, campaigns. There's a hard push on those pro activities, and we see our retailer stock up in the q four of the year prior to coming back up to Christmas.

36:27 So by changing the year and then moving out to a May year end going forward, it'll help us smooth out that seasonality and revenue impact in the business. So we don't have that lower percentage EBITDA in the first half and a really strong second half. It's more a spare flat in terms of the average or normalized trading on the business. So I think that's a key point. But to answer your question more in-depth, appreciate this is quite a big answer, I think it's quite a big Question driven. Is that, yeah, what what are we doing about driving margins going forward? Well, we're doing a a lot of things, Jeff. You know, first thing to say is that we've got strong pricing power on our key brands, the brands that we still have in the business. We've sold off the brands that were not core to our business. We've been putting through price increases on those brands to reflect the price disparity between us and our main competitors. We see huge opportunity there.

37:12 I mean, Balance Act is probably the best example I can give. Our main competitor is Cannas Balance, and that's selling at £15 RRP. Our product was selling at around £8.50 RRP up until

37:24 this year. So we put price increases through our our retail customers and pharmacy in H 12025. Will take the RRP up above £10, and that's just the first step of closing that gap between us and our main competitor. So there's a huge amount of opportunity because we've got the power on the brands. We're doing something about it. What you've seen in the first half of the year is that we've done that during the first half, so we don't have the full benefit coming through the p and l either. And also, we need to make sure we complete that price increase exercise across all of our brands and all of the channels within there, and that includes our Amazon business. So that's something that's in progress. That's step one. I think the second thing to highlight is around the

38:03 if you look at our marketing spend, we've been talking about how we've increased that today. We're not just increasing marketing spend to drive top line growth. We're also increasing it to focus on driving our gross margin higher as well, focusing on investing in the brands with the highest growth opportunity that drive the highest percentage margin improvement for us as well. So to give you a good example, our objective for this investment in marketing is whilst we're increasing our marketing 3% versus where we've been historically, it's driving a five percentage point in gross margin improvement over the short term. That's our plan. Taking a net of 2% EBITDA margin improvement, net of that marketing investment. So you see stronger top line growth than we have historically, a higher gross margin pushing from 45% to 50% over the next couple of years. That's our plan. And investing 3% of that back into marketing to deliver a two percentage point increase into the bottom line. And, ultimately, do I feel confident that we're going to do it and convicting on it? Well, yes, we're actually already doing it. So we've launched new patch new products through the first half of this year. You've seen Kate talk about all the other product launches we've got planned for the second half of this year, and that's across each of the brands. So that's just the beginning of the pipeline. We've invested in the team and innovation and branding, in digital marketing, head of product. We've got all of the team in place, the infrastructure

39:18 under Kate's team now to go and drive that innovation forward, deliver that gross marginality improvement. We're targeting as a threshold minimum 60% gross margin on our brands going forward. When we sign off any new product launches, we're already doing that. So these are good examples, I think, that show you that we're we're aware. We want to drive forward the margin of the business. We wanna get gross margins well above 50% over the next three years. So these are examples of what we're doing. But I think the overarching one to add into that is the m and a piece that Jerry was talking about earlier. When we look at what the financial criteria is for those, we want to be getting brands in our assets that are 60% gross margin, delivering 30% minimum EBITDA contributions. That's allowing significant for gross to net on marketing spend and operating costs associated with it. So these are key things we are doing already. We've been working on it for a while. We're continuing to work on them. So we've got a lot of conviction around our plan and how we're going to improve the overall annualized margins to the group up over 25% in the next three years.

40:19 Great. Thank you, Benny. Very comprehensive answer. I've got a question now from James s, which is in three parts. I'll read out the first part, and I'll ask Kate to cover that, and then I'll pick up the other two. So hi, Jerry, Daniel, Kate, hope that you are well. Congratulations on the results and the strategy change. Thank you, James. I have three questions. First one, what risks to competition do the power brands face from new entrants potentially with better scientific labeling or results entering the market? Yes. It's kind of answered two parts here. I think that we take the first two brands, which are more of the supplement brands. So we have Health and Her well, and Health and Him plus the LIFE brand. So there is definitely some activity going on in in the, in the female health space and supplementation. Lots of new entrants coming in.

41:07 I think the brand is in good good a good position with its proposition, especially having the app alongside the product, which is the number one app menopause app recommended by Orca, which is a independent body that creates a formulary of health apps for GPs. And but we also have a program of constantly looking at improving our claims. We have the number one perimenopause claim and number one perimenopause brand claim across our entire portfolio. And we continue to look at new technologies, new ingredients where we can enhance claims across the board, and that's also follows through in our innovation pipeline as well. On the side of LIFE, which is also another supplement, we have this fantastic kind of barrier to entry around this health care professional recommendation, which is really entrenched in the brand and has been for the last decade. And we're releasing the benefits of that coming through in terms of organic growth in in the prior years. Obviously, we had a small hiccup this year, but in the prior years, we've had some fantastic CAGR results.

42:07 So there was a again, this the health care professional recommendation education really gives us that enhanced position in the market, and we see that as we're continuing to drive that particular activity, as as I mentioned, to educate health care professionals and double down on that marketing opportunity. Again, we are constantly looking at innovation, ingredients, and claims. We actually have a suite of claims that we're gonna be rolling out in the coming year on on the brands. Again, some of those trust factors, and we're we're keeping a very close eye on it. So, yeah, I think on the supplement side, some interesting kind of dynamics to, to some extent, protect us from those those new entrants. On the on the other sides of the coin, we have Eeroll and BalancedActive, which are both met type two medical device products within the core of the range.

42:56 And that drip drives a a barrier to entry naturally because it's very expensive and and takes a long time to develop, the technical file, which has all of the clinical evidence behind the products, and to also maintain that. So, that is, definitely a key barrier to entry. That being said, we are also, again, always looking at claims where we can stretch the claims in the technical file, which only strengthens that position in the market for key areas like bacterial vaginosis and seeing how we can expand it into other need states. We're also looking at new ingredients and other other opportunities where we can get that edge and first move advantage into new therapeutic areas. And we have a couple of those that we're looking at that are very exciting at the moment for the coming year. So so, yeah, I think we we feel like we're in a very strong position on that brand. And similarly with Eeroll as well, we we obviously provide these technical files into other brands, and that just demonstrates the strength of that technical file and the and the clinical data that we have behind it.

43:59 And, again, we're always looking to stretch and improve those technical files and also expand those as well. So I think on those two brands in particular, in a very strong position. Great. Thanks, Kate. James asked his second question was, does the buyback indicate that you may struggle to find a suitable acquisition? Well, James, no. That's not not the case. We had quite a lot of feedback once we divested of the of the CDMA operations with all that cash on the balance sheet about returning cash to shareholders. That ranged from special dividends to tender offers to share buyback. We we think the best way to grow shareholder value is to invest this capital in organic growth and acquisitive growth of the business. That said, at the moment, the way the market is, we're currently valued on a multiple of EBITDA below the range that we would look to buy interesting products into the business, which we think is still a sensible range.

44:56 So from our perspective there, the shares are cheap, and therefore, the buyback program is to buy shares back in the company at a level that's, as I say, a rating lower than we would look to buy other acquisitions. At the point, the share price then, you know, becomes higher than that rating, and therefore, it's better for us to invest in the future with other assets, then we'll do that. But, yeah, the buyback does not indicate a lack of acquisitions. We've got plenty that we're we're looking at. Listen, the third point from James is, you state that the shares are undervalued. What price do you think they should be at? Well, as you mentioned at the back end of the presentation, you know, exit multiples in our sector averaging between 14 and 15x EBITDA over the last, I think, five or ten years.

45:43 So that depends on your marginality, growth rates, etcetera. But if look at us and the new carbon niche guidance, we're running at the rate between 7 and £8,000,000 EBITDA a year. Even on a 10 times knocks forward, adding on the cash, you know, it's putting us up towards a pound a share. So, you can do those calculations yourself. But clearly, the market and the way it's working shorter liquidity is hampering not only ours, but many share prices at the moment where value is not being reflected in my view because there's not liquidity in the market for investment. So we're very confident the long term, either as the market will recover or as we transact off the market one day, that we could value the shareholders at the right multiples. The next question, which is from Peter W, says, hearing the presentation comments, would it be fair to expect imminent views on a decent sized acquisition?

46:35 I think what I'll say on that piece is don't expect anything imminent on an m and a acquisition over the next couple of months. You know, these things are are not quick. It's really important for us to properly assess the bit the businesses we're looking at, see if it's something that can work for us, see if it's a price that can work. So, you know, that process is ongoing. We have dedicated resource. So, you know, just watch this space, but don't expect to see anything for the next month or so. Next question from Dean B. Monetary wise, what is allocated to a share buyback? Well, what we've allocated, Dean, is a maximum of the authority that's been granted to us at the last AGM, which is 10% of the issued share capital, which is just over 12,000,000 shares. So what we pay out in cash terms will depend upon what the share price is when we buy them back. So at current price, it's about £7,000,000.

47:25 But it's important to highlight that we we've not committed to that. That's just giving us the flexibility against what the authority allows us and taking that out to the July 31 running up to the next stage yet. So the flexibility is there, but our commitment will be based around how the share price moves, what our m and a plans look like, and, we'll take that as it comes in that time frame. Yeah. Thanks, Sally. The next question is from Roger h. He says, do you believe you have the right quality of advisers rather than just shovel sellers, do the head value? Which, I mean, it's it's something as a management team and his board, you know, frequently discuss. If we didn't think any of our advisers were the right advisers, we would change them. So I think, hopefully, that comment speaks for itself. Our chairman, Paul, has given us a nice supportive comment. Thanks, Paul. I won't read it out, but thank you for that. The next question oh, no. I've done something there.

48:19 Excuse me. Do you mean to unmute? Is that right? Yeah. Sorry. Something's popped up on the screen. Right. Got it now. Our next question comes from Mark H. Is there a focus on The US, the largest consumer market, in the world? Yeah. I've talked a lot. I'll ask Kate to answer this question. Yes. Absolutely. And we're she's leading the way with the health of her brand initially. We've we've had some fantastic growth in this market already under this brand starting off with Amazon. We really get some traction there. That's enabled us to enter bricks and mortar initially with the vitamin shop into 800 stores. That was in 2024. And since then, we've obviously expanded our distribution in CVS into a significant number of of stores.

49:07 So, yes, we are absolutely putting huge amount of efforts behind that brand and then also taking those learnings and adapting that across to our other brands in particular. Balance Active, which is already present in that market on Amazon and also LIFE. So there is certainly a lot of opportunity, but but also a lot of work to do, but it is definitely a a big focus for us. That's great. We've got a few more questions, which we'll carry on going through. What from Dean b, what percentage of Health and Hurt is on subscription basis? And, again, I'll ask Kate to pick this point up. Yeah. I probably I probably disclose exact numbers, but I can tell you that there is more than half of the sales online in health and hair are coming from subscription, and they're growing steadily and nicely. Obviously, being a supplement brand, we have that lovely compound growth that we can get from subscriptions.

49:57 And because the brand and the products have such fantastic social proof and reviews, we do benefit hugely from that word-of-mouth and then, obviously, people coming back and repeat purchasing. So it's, again, something we're really focused on, and Apple supports with that loyalty as well in offering women that kind of free digital support to track how they're feeling and periods and triggers and so on. And so it is a big focus of ours to ensure that we get that really, really strong loyalty, and and subscription is a big part of that. That's good. Another question from, which I'll ask Danny to answer. Is the cash in the bank earning a fair amount of interest? Yeah. We're we're earning just over 4% on the bank. So we got a so we got money tied up in ninety day accounts, thirty day accounts. And to maximize the interest rate, we can get some of that cash sitting there. So it's working for us. We'll generate around 1,500,000 of interest income on that in effect based on the cash that's in there plus the free cash flow general business.

50:56 So we'll put that to work on an acquisition, no doubt. But in the meantime, we're generating a nice 4% on it. Thanks, Danny. Another question from Roger Page. How and why do you expect to be able to attract really interesting prospects? I think, Roger, you're referring to m and a, prospects. And I think, you know, from what's important for m and a, you know, we start from the point of view of, you know, does it work for us? Does it fit our criteria? Does it fit in the right space? Can we grow and develop what we buy? Because we're not looking to buy things to sit on them. Looking to buy things to grow them. So what are the levers that we can pull to get into growth? Then we're at that point. It's, you know, how can we make that interesting for the vendor? You know? Is it the case that it's a brand that they have that they're not focusing on, therefore they're realizing cash they can recycle into other brands? Is it a company that cannot attract development capital because the capital markets for, in particular, smaller ground companies are not good at the moment? So there are many reasons. I mean, as I'm sure you know, what you know, deal has to work for both sides. There has to be benefits in it for both sides. And, you know, m and a is an art backed by science.

52:02 And so, you know, the art is in in making a transaction that works for both sides, and and that can happen, you know, not making something that's too difficult to to transact or too complicated. Another question from DNB, which I'll obviously ask Kate to answer, which is what excites Kate most about VLG over the next twelve months? Great question. I think, for me, it's the investments in both the team, but also the marketing and innovation that goes with that. So we have as as the team have have said already, we've recruited some fantastic talent within the business, and we also are bringing the talent that would already exist with the VENTURE LIFE GROUP and Health and Care together. And I think the the structure that we have in place now is is really fantastic in fantastic position with a lot of talent.

52:51 And then and that's shifting a lot of focus into innovation, digital marketing, and also utilizing the the research that we have on the health and care side. And I think it's that ambition as a group to to use that and bring those kind of best in class behaviors from both sides of the business together, but also having that financial backing to go deliver and execute that in in a really positive way. So, yeah, I feel like there is already great momentum, and it feels like a lot more momentum to come, and that's what really excites me. Great. Thanks, Kate. And and just a final question before I sum up from David. W e said, can today's presentation be posted on the VENTURE LIFE website? Yes, David. All of our results presentations get posted onto the website, so so that will that will happen. And really, for me, before we close this up, you know, thank you very much for watching our presentation.

53:40 It excites us all the time when we talk about the business. We've been through a real transitional period, and we've continued to go through that over the coming months. I think this all happens because the team we have, the people we have, and the way they deliver and grow and work for the business, they're enthused, they're energetic, clever people, and we recruit them and ask them to do what they're good at. And and that's how we work on collaborative basis. I agree with Kate. I think the innovation sort of horizon for us is fantastic. There's lots of white space in the categories where we operate, which is fantastic. We have fantastic relationships with our key strategic retailers. And as I mentioned earlier, Jebes is the other cofounder of Health and Her, you know, now focuses on strategic growth initiatives with those big retailers. And that's all about giving them insight, giving them category thoughts, giving them category ideas and helping them to grow the category as well. I think some of the key categories we work in, particularly women's health and men's health, retailers and the public are crying out for more and more in this area. So we're we're riding, you know, a good place in the market where we can support the retailers with their support for us to put the products in the right place for the shopper.

54:51 I think we've got, you know, substantial firepower. Know, the cash position wins. Fantastic. We've got plenty of cash to grow and develop. But what's really important is that increased spend in marketing. We're making sure we test that and we can look at ROI on that every step of the way to make sure we're getting the best bang for every sort of buck we spend and making sure those investments in marketing and advertising promotion are delivering the returns we want and getting what we have. And Katie mentioned, for example, making these sort of documentaries for TV or being involved in these documentaries, very low cost now but can give, you know, substantial increments in in sale off the back of those. I think the white space that's available for us, market share opportunities there is fantastic. I think the digital side of our business has got considerable legs when Peter Jackson coming to the business is going to help us to exploit that incredibly. So we're excited to energize the business. You see the great product range in front of us. Fantastic team. It's the team that delivers this. You know, it's you know, we're part of that team, but it's all the people who aren't sat around this table, supported boards, supported shareholders.

55:56 Yeah. And it's, you know, a very exciting time for the business, I think, one of the most exciting times that we've been in. Yeah. The the shares are undervalued, but, you know, our job is to to grow the business and drive the business, and we'll carry on doing that. And I'm absolutely sure full value will follow. So, again, thank you for joining us. Thanks, Danny. Thanks, Kate, for your input. And, yeah, I look forward to speaking to you next time. Fantastic, Jerry, Daniel, Kate. Thank you very much indeed for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations? So it'll only take a few moments to complete, and I'm sure it'll be greatly valued by the company. On behalf of the management team of VENTURE LIFE GROUP PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.