Venture Life Group (LSE:VLG) — Final Results Presentation

0:01 Good afternoon, and welcome to the Venture Life Group PLC final results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated on the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll.

0:30 And I'd now like to hand you over to Jerry Randall, CEO. Good afternoon to you, sir. Good afternoon. Thank you. Welcome, everyone, to the presentation. Very pleased that you're here to listen. To us, you've got myself, Jerry Randall, cofounder and CEO, VENTURE LIFE, joined by Sharon Collins, cofounder of VENTURE LIFE and chief commercial officer, and also Danny Wells, who is our chief financial officer. So without further ado, we'll go into the presentation. So we're presenting our full year results for the year ended 12/31/2021. Starting with the highlights, obviously, 2021 for us as well as many people, we have the issues of COVID and supply chain. And as we go through the presentation, we'll address how we've managed those, particularly the supply chain issues, which are obviously quite severe at the moment, and how we've dealt with those and and how we manage those.

1:24 For the year to December 21, we reported revenues of just under 33,000,000 Adjusted EBITDA, 6,600,000. So an increase of 8% to 9% on each of those, respectively. We've shown here also on the slide our pro form a revenues for '21. We made two acquisitions during the course of the year, BBI Healthcare and then some assets from, Helsin, a Swiss company. If we included, those as if they've been with us for the whole year, that's where the 37,800,000 revenue comes from. But it gives you a view of our run rate as we exit the year and the size and the quantum of the business. We had good momentum in the second half of the year after the acquisitions. And in particular, you can see that quarter four revenue was significantly up on quarter three. A little bit of that came from the fact that in the second half of last year, there were significant logistics issues, being able to book lorries, being able to, make shipments. And we made sure we booked all of those well in advance, but it did mean that even some of the production in q three was invoiced in q four. Nevertheless, underlying revenues, q four were up. And the second half of the year, on a like for like basis, so if you think a pro form a type basis is up over 40%.

2:36 Order book, at the end of the year and even now significantly ahead of last year. That isn't, all down to growth. It, it incorporates the expected growth that we have for 2022. But also, we're getting customers to order further out more in advance so that we have greater visibility, but also so we can manage those supply chain issues, which, again, we'll we'll give more detail on as we go through. We made the two acquisitions during the year, and we'll give you some updates really on how those performed in '21, but also how they're performing going forward now. We've got three graphs we're going to show you now, and this is really to put our business in context, in particular, to give a view over the last five years of how we've grown the business. This reports this slide, excuse me, shows revenue.

3:24 This first slide is reported revenue, so what we've reported in each of those financial periods. And as you can see, delivering a 20% compound annual growth rate was 23% in the early years, but, obviously, the issues of last year, COVID, and, some of the issues we suffered, reduced that. Last twelve months, 9%. And you'll see VENTURE LIFE brands, which is the orange bar, growing to 54 of the overall revenues of the group. And that's important, as you'll see in the next few slides, because those brands deliver higher gross margin than our customer branded business, which is the turquoise bar. This next slide, we've, made 2021 a pro form a number. So that's the 37,800,000 of revenue that I I outlined to you earlier. And we stripped out the one off hand sanitizer gel sales that were particularly large in 2020 to give you here a a view of the underlying sort of legacy plus acquired business.

4:20 And you'll see there that that gives us a 24% compound annual growth rate for the last five years, 42% for the last twelve months, and just showing you there the gross margins that are attaching to each of those parts of the business. So for many years now, obviously, and and going forward, our strategy and vision is to increase the level of VENTURE LIFE brands within our business. These are brands which we own entirely. We own any IP. We own formulations. We own data. We own brand names, etcetera. And these, because of the fact we own all those assets, we can derive higher gross margins from them. Now also over that period, the customer brands business hasn't gone down. That's grown as well. It was it was flat roughly last year, but has grown consistently over the years. And because we have a lot of capacity in our manufacturing facilities, it still makes perfect sense for us to continue to manufacture other people's products, develop and manufacture, not just manufacture, because that delivers real term real cash margin to the bottom line. And the blend of those two margins has given us our overall margin of around 40% for 2021. But as Danny's gonna explain later, you'll see that going up, as we go forward.

5:29 The final slide, in these three graphs is just to show you the organic growth that we deliver. So, again, question that we're asked is you can acquire and assimilate products. It's great. Integrate them. But can you actually grow them? And you'll see here that over that same period, the contribution from the organic growth in our business is almost half of our overall growth rate. So, we can answer the question quite clearly that we can, yes, acquire products and integrate them and businesses, but we can also grow them in our hands. And that's quite important both now and in the future. Our target's always been to deliver 20% compound annual growth rate, half of which from acquisitions, half of which will come from organic growth. And therefore, you know, we're we're delivering that, and have done for a number of years, and you'll see that as a theme, going forward. Also, we wanted to give a bit of transparency on the businesses we'd acquired and how they performed in our hands. And, this slide you see in front of you now covers the most three most recent acquisitions, which is PharmaSource, which we acquired at the start of 2020, but also BBI and the health in assets, which we acquired last year. If I start with PharmaSource, you see that that grew twenty three percent first year, in our hands.

6:40 It was flat over the last year, and that was, two factors there. COVID did impact our Dutch retail business, which is part of PharmaSource, but also we had some switches between international partners, some performing better, some performing not so well. So that compounded to give us a flat performance. We expect that business to continue to move back into growth as we go into '22. Both BBI and HealthSim performed well in our hands. The figures in the graph here are the full year numbers. Obviously, we don't recognize all of those numbers in our reported revenues, but you'll see 10% annual growth in the BBI business, good growth in the second half. And later in the presentation, Sharon will share with you the growth in those products that we've seen specifically. Similarly for HealthSynn and, you know, seeing 60% 16%, excuse me, annual growth on those products. So very, very happy with those in our hands and how they've been performing, we expect those to continue to grow forward.

7:39 This slide, we talk about Ultradex and and Dental. They were slightly different acquisitions slightly further ago, Ultradex in 2016, Dental in 2018. These were both declining assets in contrast to the three you saw before, which were growing businesses when we acquired them. So the pricing is different. We we paid a very low price for these. And so what you have to do is stop the decline in these products, stabilize them, and then begin growth. And we'd always had the vision with these products that the majority of the future growth was gonna be on the internationalization because neither product was particularly internationalized when we acquired it. So in the graphs you see here, the orange bars are sales into The UK, and the and the gray component of the bars are international sales.

8:25 So if I start with Ultradex, when we bought that, we saw a slight dip in The UK in the first year, some delistings of dissatisfied retail customers, that were were effectively happening when we acquired the brand. And, and you see that's happened. That impacted in 2017. But we started to internationalize the brand, and so overall revenues were growing. We saw in 2020 some revenues internationally out to China. But, of course, as I'm sure you're all aware, we had some difficulties with our partner in China. That's now changed. Again, Sharon will talk about that later in the presentation. So we also suffered a little bit in '21 with Ultradex. It's an event driven product because it's for halitosis fresh breath. And similarly, in 2020 and '21, if you're not going out as much because you're locked down, you're not going to work, you're not going on dates, you're not seeing people and socializing, then that fresh breath sort of need is not so necessary. But we're beginning to see that, the sales of that grow again, and improve as you'll see going forward. Similarly, once the China partner, the new partner, comes online, then we expect to see some revenues there grow.

9:33 Dental was a slightly different story. We had bigger international sales once we acquired it in in China, so that's in 2018 and 2020. And we stabilized and grew The UK business. Again, we'd expect the Chinese sales to improve once our new customer starts to sell the products, which we hope will happen soon once Shanghai, etcetera, unlocks. So both of these brands, what we achieved with them was to stabilize The UK business and to launch the international business. And both of these will see growth overall in the coming years. Probably low single digits in The UK, but stronger growth internationally. A little refresh of, our coverage. In terms of where our operations are. Since last year, we bought off, we've added the Swedish operation, which is a manufacturing facility that came with the BBI acquisition. Our employees up to a 145, and, a large part of that came through the BBI acquisition where we took on, the team there, but also natural growth. You'll see our number of partners have grown significantly, and the majority of those came in through the acquisitions.

10:38 Some of them are through organic growth. But they brought quite a long tail of small partners in, and you'll expect over to see over the next couple of years, we're gonna thin down that tail. We're gonna take out some of those partners at the smaller end, which probably are not delivering, a fully allocated profit and reinvest that resource into strategic partners to generate more growth there. So now we sit with a portfolio of, brands in six areas. The oral care, dermatology, and foot care were present in our business before 2021, but the acquisitions during 2021 have brought in the women's health, the diabetes management, and the oncology support. And these are the areas where we're gonna be focusing our efforts, in the short to medium term because these, we believe, will deliver, much more growth opportunities and growth in revenues than the others. We've mentioned oral care already.

11:30 I didn't mention in that previous slide, but the oral care mouthwash market has been declining over recent years. So, and you'll see later in the presentation, we've actually improved our market positions for those products despite that decline. But for us, these will go into a bit more of a maintenance mode in The UK. We'll focus on, international. And the dermatology and foot care products similarly still continue to grow internationally, but, I hope they'll be a maintenance mode now. We're gonna be diverting the majority of our A and P into the women's health and diabetes products as well as increasing the level of A and P, because we see significant growth potential in these areas, because we have a number of spaces in those portfolios, but also because they're a growth area. We've seen the Balance Active brand growing very well in The UK in 2021.

12:18 It's continuing to grow well in 2022. And similarly, LIFE, which is for hypoglycemia, which, again, we acquired as part of The oncology support products that we acquired from Helsink, there's good growth potential for those, but we don't sell any of those directly ourselves because they're sold mainly into hospitals and palliative care specialists. But there's some big white spaces in those portfolios in terms of countries, and we expect to see good growth coming out of those as we go forward. Now we've talked often about our operational leverage and manufacturing scalability. We represent that on this slide for the group. So the orange parts of the bar reflects our Swedish site Nesta, which makes the balance active gel. And the turquoise bars represent our Italian facility, which makes the majority of the rest of our products. And the first bar, you'll see we made 25,000,000 units in Italy last year and 2,000,000 in Sweden.

13:13 And the unit can be a product or a box of seven tubes, however it's packaged.

13:19 And the next three slides, talk to the capacity that we have. So you'll see the Swedish site is operating on operating only at 20% capacity. We can produce 10,000,000 units at that location, so we've got a lot of capacity to go there. And the Italian facility can produce 55,000,000 units, and that was through the investment we made in 2020. So a lot of capacity there, and that's going to be absorbed through organic growth and, we think, further m and a opportunities. But we will always keep a bow wave ahead of us of capacity because we don't want to limit our opportunity in new, new ventures, new products, new markets, new customers by, not having the capacity ahead of us. So as you see that capacity utilization increase, that will have a positive impact, on our gross margins.

14:07 We have two slides now talking about the challenges, at the moment. The first one here talks about the general global challenges. And, you'll not be surprised, that we're listing here supply chain, cost of living, the Ukraine, Russia crisis, and, of course, COVID. So these all of these factors have, predominantly impacted at the moment supply chain. And we saw in 2021 that that impacted cost in particular as, the rising cost of energy, the fallout from, businesses suffering under COVID meant supply prices went up. And we've gone through a period of of passing on those price increases to customers. What I think we saw towards the back end of '21 and and is now more prevalent, I would say, is the availability of supply. So that's whether it be raw materials or whether it be packaging.

14:57 Availability has become a bigger issue, I think, than cost. We've we've been through a process of passing on cost to customers. And for example, in The UK, we increased the price of dental to our customers by 14% at the start of 2022. And we had to give notice to the customers, the retailers. We've done that. And then and that that retail business in The UK and Netherlands represents about 30% of our overall revenues. The other 70% we sell to partners is made to order. And, again, for those partners, we've been passing on those additional costs. There's always a bit of a lag because it's between when you give a notification and when they place order and it's produced. So but nevertheless, as Danny will show you later, we'll begin to see the the benefits of those price increases coming through to our gross margin.

15:43 But availability is, as I say, becoming a bigger issue now with reductions in supply. For example, components and items that come from Russia or Ukraine, we've had to alternative source those. But you're also seeing other people coming into the market for raw materials who perhaps weren't in our sector before, and that's putting more pressure on reducing supply. So a lot of double sourcing is going on. We're asking also customers to order a lot further out. That's 70% of the business with partners that's made to order. We're getting them to push their ordering further and further out. Now that's not pulling revenue forward in our business, but it's given us greater visibility. So typically, we ask them to order three months in advance, but now we're asking them to order six or seven months in advance. And that means we can then ensure we secure the supply of the raw materials and the packaging, which, again, is taking longer. I'll give you another example then.

16:39 We a packaging tube that that we use. That's gone from being a six to eight week lead time to order to now between a twenty six to twenty eight week lead time to order. So we have to be ordering that a lot further out and to do that because that's not a risk we should carry. We need customers to order further out, and the customer's been very responsive on that. So our order book is well ahead of last year. We don't publish the size of the order book in absolute terms for commercial sensitivity, but it's reflecting the growth we're expecting, and it's going further out, giving us a greater visibility. The other challenge that's in our space at the moment is relating to medical So a number of the products we sold are registered as medical devices. And we're going through a transition process from old regulations, which are now being upgraded to new regulations.

17:28 The old ones are called the medical device directive, the MDD, and the new ones, the medical device regulations. And what's happening in that space is a lot of the very sort of simple products that snuck in under the banner of being a medical device that weren't really a technical product will fall out because the class one of medical device directive categorization will fall away. And it's requiring, people who were in that class one category, the products that were in there, to either take the products down to a cosmetic registration and lose any claims at all to upgrade the quality of the data supporting the cause and effect relationship around claims. Now the majority of our medical devices that we have and and of our customers are in the class two and class three. So the

18:12 technical files that we have already are in in good shape, and there's not a huge amount of additional clinical work we have to do for that upgrade, but there is some. So as we transition our products through this over the next few years, the deadline being May 2024, we're already in that process. It's already all in our budgets. We're already in close consultation with the notified bodies, and we expect that process to go through. It's a a intense activity. There's a very small risk to some very low level revenues for us. But, again, we think we've managed that and don't expect there to be a major disruption. But, again, just to make shareholders aware of that transition. I think the the positives coming out of this is that medical device products will become more valuable. There'll be a lot less medical device products around because of these class ones that disappear and a significant number of business businesses who have not taken the appropriate action early enough in order to upgrade their products to the new regulations. And in that situation, those products are gonna come off the market. So you'll see better grade medical devices, more appropriate remaining on the market.

19:14 It increases barriers to entry because of the, additional, processes you have to go through. And I think it will, as I say, increase the value of those medical devices that we have. Just one slide I'm gonna put in here regarding, ESG. It's important to us, our employees, our stakeholders, shareholders, and everybody. And and we've launched officially now our ESG project, which which we're calling sustainable life. And it's because you want to become that trusted, responsible, and sustainable business. You want to attain the b corp standards across our business. We have been doing a lot in this area already, but we haven't, I think, communicated, well enough to shareholders what we're doing. And, you know, for example, we use a lot of solar power in our plants, in our factories.

20:01 We recycle a lot of the water and the heat and energy that we use, reduce wastage. So there's lots going on, and it's time that we codified that and made it more public. So what we're doing at the moment, we have a team made up of, people within our business across all the sites, and all the areas. We're conducting an audit at the moment with them and with our stakeholders, including shareholders, including customers and suppliers. And that will output, information which allow us to determine the priority sustainable development goals that we should, have. So which of those 17, goals set by the UN, should we target and prioritize? And that will give us a set of, performance indicators. And then each time we come to shareholders to update, with our results every every six months, we'll report against these KPIs and how we're doing and how we're progressing. So an exciting project embraced very well by the whole team, and I look forward to updating you on that as we go forward.

20:58 I'll just summarize the two acquisitions we made during the year. I won't spend too long because I think what's of interest to, you as shareholders is how they're performing and and the prospects we see for them. But we acquired the BBI Healthcare business predominantly three products, but predominantly Balance Active, which is back for bacterial vaginosis, a pH imbalance condition in the vagina for women. That product is the number one BB treatment in The UK. And, also, we acquired the LIFE hypoglycemia brand. This is a measured dose glucose product, which is suitable for diabetics who want to manage their their glucose intake or or deal with hypoglycemia. Also, it is used in the sports setting as well for glucose supplementation.

21:44 We also have a a further product in the area called Glucogel, which is a recommended product by doctors for people with severe hypoglycemia, and and that's a very steady product. But how soon we acquired some oncology support products. These are products that treat the side effects of oncology treatments. And and, obviously, I'm sure as many of you know, these are quite severe. GelClair is for severe inflammation of the mouth that comes around when head and neck chemotherapy or radiotherapy. That product's been in the market twenty years, sold in many countries, but some good white space opportunities for that. We actually made this product already in our factory as a as a customer brand. And so now we're we've required that, increment in margin by owning the asset. And POMI tea, which is for the reduction of, levels of PSA, in men who have prostate cancer, pre prostate cancer.

22:36 These are very strong anti inflammatories. It includes broccoli, includes pomegranate, includes turmeric. But really good clinical study on this and showing the positive impacts for patients with prostate cancer and reducing the levels of PSA and therefore the danger of progression of that disease. BBI came with a portfolio of growing revenues. And you'll see here that prior to our acquiring, it was growing at 5%. And then the company boosted their the way they dealt the products and and what they did with portfolio and and saw 10% growth in recent years. And those those products are growing very well going forward. And as I say, Sharon and Danny will tell you a bit more about those going forward. PLC, and we acquired these assets at a time when oncology treatments were falling because of COVID. And so sales of those were falling. There were some other factors within there that contributed towards the sales fall of the the loss of a US partner because of it went into chapter 11. So but as you can see in 2021, already starting to rebound, and we see significant growth potential in these products.

23:42 So I'm finished now. I'm gonna hand over to Danny. He's gonna tell you a bit more about the financial highlights, and then Sharon will talk a bit more about the commercial opportunities we have. Thanks, Jerry. So we're on slide 20 now. I'm just going to talk you through the key headlines from last year. Revenue growth 9% to 32,800,000 and two key factors at play last year. We we had had the non repeat of hand sanitizer gel and the underperformance of the China partner, which saw revenues go back 5,500,000 on those parts of the business. But offsetting that and putting the business into an overall growth of 2,700,000 was the impact of the new acquisitions. And they contributed 8,500,000 of revenue last year in total. That was seven months of the BBI Healthcare acquisition and four months of the health in business. So 32,800,000 top line last year on full a full year basis if those revenues have been in if those acquisitions have been in the place all year, that would have added another 5,000,000 of revenue.

24:41 So we would have been on a pro form a basis, 37.8 coming out of last year. Gross margin percentage actually went backwards last year to 39.6% from 42.7 year before. But in the second half of last year, we had gross margin percentage of 42.4%, which was much which is much more reflective of of the the newly enlarged group with new acquisitions, profitable products in the portfolio that are accretive to the underlying gross margin on rest of the business. So it gives us a better traction and view of the gross margin expectation forward. And we'll talk through the gross margin percentage movements in a couple of slides time and how that's moved from 2020 through to where we are today.

25:28 Adjusted EBITDA was up 8% to 6,600,000. The new acquisitions again played a good impact into into that that, especially in the second half of the year. We had 4,700,000 of EBITDA in the second half. And and from a cash perspective, we had although cash was at naught 600,000, net cash generated from operating activities last year being being down on the previous year where it was 2.8. What's important to be aware of here is the end of last year, had very strong q four customer billing at the end of the year. And that's a temporary adverse working capital flux our debtors went up significantly, and we've since collected that cash since year end. So if I just draw your eyes to the bottom of the slide here on the net cash bullets, our net debt at the end of last year was 3,200,000.

26:17 But we've actually that's come down quite a bit since the end of last year. So we're around net debt of about one point eight, one point nine million as of today, and that really reflects the collection of cash on that strong q four billing that's happened in q one of this year, which we're then putting some of that back into investment on raw materials in light of the the operating environment we're in right now because we're having to order goods much longer in advance than we would normally as Jerry was talking about earlier. So we are are seeing some inventory builds on the on the back of that to make sure that we can supply our customers later in the year. We'll talk about that a bit more in a couple of slides time. Slide 21 now. We've got here is just a visual, some graphics around how the mix of the VENTURE LIFE revenue portfolio has changed over the last couple of years. And the the green bars representing the customer brands, that that refers to CDMO revenues, customers served out of our site in Italy at BioCosmos.

27:16 And what you can see is that those revenues account for 41% of our business and they generate a gross margin of around 30.4%. But the VLG brands section of the chart, and I'm talking to the the large pie chart at the top, those were 59% of our portfolio at the end of last year. And that's grown significantly from where it was in 2020 where that was 51 to 54 and now to 59%. And this is reflecting the acquisitions that are being made. And when we say VLG brands, we we're this could be our brand on the box, our trademark. It could be our customer's trademark, but it's our IP. It's VENTURE LIFE owned IP. And And we we generate a higher gross margin percentage from this part of the business. Last year, those VLG brands accounted for around 46% gross margin, whereas the customer brands were 30.4%, as I said. So quite a difference between the two. And if you look to the charts on the right hand side, it just breaks down that 59% into more detail so you can see what are the key brands within that. And if I just draw your attention to the top two on that list, Balance, Active, and Lyft,

28:21 which account for quite quite a a significant part of that 59%. These are brands that are generating 6550% gross margin respectively. So you can see that these are highly accretive to the rest of the portfolio, which is around the 40% mark and through to 45% on some of the other products in the midsection here such as the the Gel, Claire and F and P products. But we're growing the portfolio with more profitable brands accretive to accretive to the group, and that gives us confidence in being able to get back those gross margin percentages to where they were at least in 2020 when we had the hand sanitizer gel benefit in as well. So on this slide now slide 22, just going to walk that gross margin in a bit more detail. So on the left hand side, this was 2020 actual when we did 42.7% GM.

29:13 Now in that year, we had the benefits of those one off hand sanitizer gel sales when we did 3,500,000 that year. Those have not repeated in 2021. And that has had a significant adverse impact on the overall GM percentage last year because having that additional throughput in the factory in Italy gave us great operational leverage across our other products as well as selling a product which generated a high level of gross margin relative to the rest of the portfolio. So that was a significant adverse impact we saw in 2021 and it was compounded really by the supply chain environment in the second half of last year. So you can see that on the left hand side of the bridge, we've got 1.6% adverse impact from input prices. And what we're talking about there is in the second half of last year, we saw raw material costs increase, packaging costs increase, the cost of sending goods to our customers and booking freight containers shot up significantly.

30:10 We were cost of container was going our freight container was upwards of €25,000 in exceptional cases or 13,000 more normally, significantly more expensive than it has been in previous years. So the business had to suffer these adverse impacts on its p and l. But offsetting that was the more positive and mitigating impacts of the new acquisitions that were made. And you can see there the impact of the m and a had a 3% positive impact on gross margin last year. So that was the impact just for the in year value of those acquisitions. So seven months of BBI, four months of Helsin. Overall, those acquisitions will push up GM percentage by about 5%. So what we saw in 2021 was that partial year impact to that, which got us back up to 39.6% overall for last year. Although as I said on the earlier slide, gross gross margin percentage in the second half was 42.4%.

31:06 Just moving to the right hand side, just to we wanted to outline how we have visibility of getting back to above 42% gross margin. We're we're not naive to think that those supply chain pressures aren't going to continue. We've seen it continue to be a challenging environment in q one of this year and the cost of gas and energy particularly has has risen significantly. Now what we're doing is we're passing on as much of these cost pressures as we can to our to our own customers. We started that at the end of last year from our BioCosmos site, and we landed a dent a price increase in The UK on the January 1 on our dental brand, which which was was accepted by our customers as Jerry mentioned earlier. But we're continuing to pass on these price increases throughout this year ranging between three to 6% across the international and CDMO part of our business, that customer brands part of our business. And that 3% or 6% depends on what our customers are buying from

31:59 us and what pressures we're seeing. So the margin protection strategy on that, the 0.70.8% in year mitigation we'll see from passing on those price increases Again, it just reflects a lag effect of the fact that we're passing these on gradually over time and we have some raw materials which were procured at the end of last year which have unwound out of inventory in the beginning of this year. So it gives us great confidence over our ability to get back to that 42%, as I say. And as you saw on the previous slide with the portfolio growing in terms of VLG brands, which are significantly accretive to the gross margin, think that we can push up that gross margin percentage further over the next two to three years quite comfortably.

32:45 Slide 23, just briefly, exit run rate. What we just wanted to represent here is that we've talked about reported numbers, revenue 32.8. We've talked about pro form a revenues being 37.8 if those acquisitions have been placed in place all year. But also, we signed a new China Chinese partner, Samarkand, at the end of last year. And we've done the first shipment to that customer at the beginning of this this year. So what we just wanted to give a visual here on is where we really see the business today in terms of the top line, gross margin percentages increasing. And and then lastly on the EBITDA, you can see that we've shown the pro form a number of 7,900,000 EBITDA there, but we've not shown a run rate number. And part of the reason of that is that there isn't commercially sensitive information in there. But what I want to highlight is that when we acquired BBI Healthcare, we identified 7 figure cost synergies.

33:38 Now a large part of those cost synergies were executed at the end of last year through mixture of headcount, outsource consultants, agencies. And we will see the full year impact of those cost synergies come through in 2022. So we had a partial year impact in q3 and q4, which is reflected in the 7,900,000 EBITDA you can see on the slide. Moving to slide 24, just an overview of administrative expenses. It's a big number in the p and l, 10,600,000 last year coming from 9,300,000 the year before. And just to talk to what's grown that admin administrative administrative overhead to begin with. We've got the impact of the BBI Healthcare cost base. That drove up admin by about £1,000,000 last year. And then we had a significant increase in non cash costs with the amortization and depreciation, which was reflecting those new acquisitions that have

34:33 been made, recognizing intangibles on our balance sheet. All of those intangibles have finished lives on them referencing ten years UEL to twenty years UEL. So we've got the unwind of the amortization on depreciation of those assets. R and D, you can see that that was a small saving in the previous year but we're reinvesting in R and D this year and really driving that with the MDR investment that Gerry was talking about earlier. So just to give a quick look at the pie chart on the right hand side, you can see that out of that 10,600,000, which is what the pie chart represents, that the amortization and depreciation accounts for 3,700,000 of that and that's noncash cost. So the rest of the overhead basis is predominantly being driven up by the investment in the BBI Healthcare acquisition.

35:21 I won't talk through Slides twenty five and twenty six. There's a lot of detail on these. And so I'll hand over to Sharon. Thanks, Danny. So on to Slide 28. I've got a couple of slides that will talk through the commercial progress seen last year, starting with the ex BBI brands. And these are Balance Active, LIFE and Glucogel that's already been mentioned.

35:45 On a pro form a basis, these brands grew by almost 10% to GBP 10,300,000 last year and that growth was driven entirely by The UK market. So just staying with The UK market, we saw some excellent growth here, particularly on Balance Active and LIFE. Balance Active saw a 33% increase over the prior year to GBP 2,200,000. And that growth was really down to two reasons. First of all, Amazon, we saw excellent growth on the Amazon platform. Last year, Balance Active is now the number one best seller in intimate care on the Amazon platform. And also that growth was driven through better education of BV as a condition, but also greater brand awareness of Balance Active itself. And on the right hand side of the chart, you can see that we mentioned what's called a symptom checker.

36:38 This is a tool that we have on our website. It's free to use for any woman. And last year more than 250,000 women went onto our website and used the symptom checker. There's a series of about six questions that they're asked and at the end of that journey they'll know whether they have BV or thrush or any other condition. And as you can see, a significant number used it last year and that was up by twenty nine percent against the prior year. What I would also say is that BV is a condition that is often misdiagnosed and sixty six percent of women believe that they have thrush when in fact they have BV. So this whole category is much larger we believe and it's really now for us in particular to help with the education of of the condition and also help with our brand awareness.

37:33 LIFE is the second product to talk through. This is, as Jerry's already mentioned, a product for hyperglycemia, which is low blood sugar levels. And LIFE saw a 29% increase against the prior year and took the revenue to £3,100,000. And that was really down to expansion into Boots. We're now in all of the Boots estate and we also launched in Asda as well. And then finally Glucogel, as mentioned, this is again a product for hyperglycemia. It's for the more serious cases of hyperglycemia where the caregiver would actually administer this product. It's been in the market for more than forty years. It's the number one prescribed product for hyperglycemia here in The UK.

38:23 And sales are very steady. You can see that we saw a 6% increase last year to GBP 2,100,000, and we expect the same level of growth moving forward. So very good, very strong performance on these brands here in The UK. If we then turn to the international markets, we've got a number of international players or partners, but by far the biggest is Bayer. And our relationship is very strong with Bayer. And when we acquired the business last year, we one of the first things we did was extend the contract length with Bayer. So Bayer have two contracts in place with us, one on the gel and one on the pessary. It's exactly the same product, but it's a different delivery system.

39:10 And that contract length on the gel was due to expire in 2024, so it only had a couple of years to run. So what we did immediately after the acquisition was extend that out to 2030. So both, in fact, the JAL and the pessary now run to 2030. There's another eight more years left on the contract. And at the same time, we also extended the number of territories in both of those contracts.

39:35 The pessary contract that was signed in 2020 only had 13 markets, international markets in that agreement. It now has 51 markets. And also the GEL, we increased, increased, the the number of territories up to 50 as well. And what we will see in terms of the next sort of one to three years is Bayer rolling out their product into those territories. And so we're going to see further growth from from those from that international expansion. The other point to mention is that over the last couple of years, it's probably taken around two to three years to get regulatory approval in Brazil through through AmVisa, which is the regulatory body there.

40:21 It's quite an onerous process, but we finally got there. And the registration approval came through last year. And in fact, we're we'll be gearing up to launch with Bayer in July. So goods are already on route, and Bayer will be launching in Brazil. A couple of post period end highlights. Just to say that Balance Active had a very strong performance, as I said, here in The UK on Amazon. And so we've launched Balance Active in Germany on the Amazon platform. It's only just gone live in the last couple of weeks. And also at the same time, we've recruited a new head of ecommerce into the business. She will manage that launch and in fact, she will manage the whole of the Amazon space here in The UK across all brands and also when we go into the into The US this year.

41:15 And then the final thing really is on LIFE. We signed a long term distribution agreement with a very good partner in Ireland, a partner called Pemex. They've got very good distribution networks in Ireland, And that relationship has just started and they'll be launching LIFE for us in a couple of weeks' time. So in terms of organic growth opportunities, we're really excited about these brands and what they can bring for us. In terms of opportunities, there's opportunity opportunities to expand into The UK market further. So, yes, both Balance Active and LIFE have got good distribution in the health and beauty stores. So Boots and Superdrug, they're both on Amazon, so they're both online.

42:06 And they are in some grocers, some retailers. So they're in they're in Aston, Morrison and Tesco. But they are there are some notable gaps. So they're not in Sainsbury's, they're not not in Waitrose or Ocado, and they're not in any of the the value retailers. And when I talk about a value retailer, mean a B and M bargain, a saver, a Worldco, etcetera. So we feel that there's a lot more expansion into those retailers and we're having conversations at the moment. I think expansion will also come internationally as well, not only through our existing partners such as Bayer, as I've already mentioned, but also there's interest in both of these products internationally through new potential partners, so into those markets where we don't have any presence.

42:55 And then finally, innovation. Growth will be fueled by innovation and we're already working on innovation, particularly for Balance Active, and we'd expect that to go live at the back end of this year. Just moving on to Slide 29. This is these are our oral care brands. This is Ultradex and Dental. And both of these brands suffered as a result of our Chinese partner last year. If you take China out of the equation, then both brands would have seen modest growth of around 2% combined. So here in The UK, just on dental, we saw the expansion of some dental products into some supermarkets and value retailers. And as Jerry's already mentioned, the brand dental is now the fourth brand in the mouthwash subcategory here in The UK behind the big guys, behind Listerine, Corsoville and Colgate.

43:50 And that's that's, you know, that's a huge achievement. You know, we're already ahead of the likes of AquaFresh, SenseDine, Oral B, etcetera. When I look at Ultradex, Ultradex, as we've already mentioned, is a brand for bad breath for halitosis. And this did suffer particularly during lockdown. As Gerry mentioned, as people were locked down, they weren't out and about. There was less product being used and as a result, the brand suffered. Last year, it lost 8% in terms of revenue, which was a $165,160,000 pounds. Having said that, we did fare better than our competitors and the chart on the right hand side helps to tell that story.

44:36 So our major competitor in this subcategory is a brand called CB twelve. It's owned by Mylan, which is a huge pharmaceutical company. And over the last one to two years, we've been taking market share from them. And as you can see, in January of this year, we're now the market leader with 53% market share. And what I would say is that despite the difficult year, both on Ultradex and Dental, the second half of last year was 10% higher than the first half and that momentum has continued into the first quarter of this year. So we do think that there'd be very modest growth on both of these brands this year, particularly here in The UK, and I'll come on to talk about China.

45:22 So one of the post period end highlights for us was to appoint a new Chinese partner, which we announced January 6, and that was Samikan's, Global Group. They're a UK based company. They're based here in in The UK, publicly listed, and they have infrastructure not only here but also in in China, and they're based out of Shanghai. There's a 145 people within the group, half of which sit in in China. And as Danny said, excuse me, as Danny said that the first shipment was picked up in January and made its way across to Shanghai, and it and it sat in the the Shanghai port for sort of six to seven weeks because as you know, everything is locked down there and it's still locked down.

46:11 In terms of where we are now, the goods have actually reached shore. They do have to clear customs, which is a formality, and then they have to get into the warehouse before the guys can actually launch the product. But at the moment the warehouse is closed, their offices are also closed. They do have some optimism that things will start to normalize in Shanghai and in other parts of China in the next couple of weeks. And as and when that happens, we will then the guys will then launch both products, but with particular focus on dental. So we are a couple of weeks delayed, and that's simply because of the lock down in China. You know, I think Samikons is a great business. They what they do very well is connect Western brands to the Chinese consumer.

47:01 They've been doing that for a number of years. They've got brands within their portfolio that are much bigger than Ultradex and Dental, and they've got very good relationships with the online retailers out there, so the Tmall's, the jd.com's, etcetera. So we believe that they are a good partner for dental and Ultradex, and we look forward to them launching. And what I would say is with regards to China and the numbers, in the Singer's report that came out, the analysts report, there's no numbers in there for China this year. And even with SENCOS, there's very little in there, so less than GBP 500,000. So we really see that the growth will start to come through at the back end of this year or indeed next year.

47:49 The next point is on Cardiff University and the clinical study, which you will all know about. We had a partnership with Cardiff to do a clinical study on dental to understand whether it had any impact on COVID, within the oral care, within the mouth. And the study, was finished last year and Cardiff University wanted to get the study peer reviewed, independently peer reviewed to add credibility to the results. That finally happened and the results were published in the Journal of Lipid Research in April of this year. So from a timing perspective, whilst that doesn't really work here in The UK because obviously COVID is not really prevalent at the moment, as and when we do have another spike, we will then make much more noise about it. So we haven't really made much noise because of that reason.

48:46 But what I would say is going back to China that given that COVID is rampant out there at the moment and there is a lot of concern by the Chinese consumer about not only oral hygiene but hand hygiene, our partner is quite excited to be able to utilize the clinical study with dental. So the timing seems to be seems to be right for for the Chinese market. And then finally, just a couple of growth opportunities. Jerry talked about earlier that when we launched dental here in the or when we acquired, I should say, dental in 2018, there was a couple of delists that happened pre acquisition, and one of those delists was Wilco.

49:32 And it's taken us four years, but we've managed to get dental back into Wilco, and that will go live in the summer. So, again, we'll see some revenue impact this year, but the full year impact will happen next year. And then there's finally some innovation that we're working on with Tesco as well. And then just really my final slide before I pass you back to Gerry. This is the rest of the international business just to go through. So the HealthSyn acquisition that we made in August of last year, as said, GelClear and Povetea are the two key brands. And those brands on a pro form a basis saw a 16% increase last year to £2,900,000. And as has already been said, we know that cancer treatments were impacted during lockdown.

50:23 As lockdowns have unwound that we've started to see cancer treatments, back online. So we do feel that GelClare, will benefit from that. That growth that we saw last year was entirely from GelClare. And as more and more cancer treatments are happening, we believe that there'll be more growth in that product. What I would say is that organic growth opportunities, particularly as strong we feel on GelClare, not only through the recovery process, but also through international expansion. There's a couple of big markets that are vacant at the moment, so USA, Brazil, Canada, and we're looking for partners in these key markets as well as some of the key EU markets.

51:13 And what I would say is that The USA and Brazil, both of those markets are very onerous to try and get registration. But for GelClare, registration has been obtained in both of those markets. We've got a five ten k approval already in The USA and Amvisa in Brazil has already registered the product, which means that we now just have to find the the the right partner in both of these markets to be able to launch. So we don't have to wait to go through the whole registration process. So once we have found that partner, they will be able to launch fairly quickly. PharmaSource, Gerry has already mentioned this, but as said, sales were flat last year to 2,700,000.

51:58 We signed a couple of international agreements and we'll see further growth expansion into some of the retailers here in The UK, but also the key partner in The Netherlands, which is Croydvat. And then finally, just to finish off before I hand you back to Gerry, on the customer brands business, this is the development manufacturing side of things by Cosmos, which is our facility in Italy. You can see it saw a 3% decrease to £15,000,000 last year, but actually that was due to the reclassification of some of the health in revenues post acquisition where we moved that revenue from the customer brands business to the VLG business. If you take that reclassification out of the equation, then actually this part of the business was flat.

52:50 And I think that was a good result given the challenges that we saw last year and the overstocking that we saw in 2020 and then some of our partners unwinding that stock last year. But we did see good progress on some new opportunities. We signed deals with Alpha Sigma, with Accord Healthcare, which is a big oncology company here in in Europe. And these are deals that we did last year, and we're we'll see the benefit this year because we're going into production. So I think all in all, was quite a mixed year. We had some real disappointments with China, which we've actually dealt with, and also the hand sanitizing gel not repeating. But, on a positive note, what I would say is that, the acquisitions that we made, we've integrated them very well within the business and, we're helping we're starting to see that that growth come through as we as we move through this year, and into the the coming years.

53:52 So, Jerry, just over to you. Great. Thank you very much, Sharon. That that's the most of our detailed slides, but I'll just wrap up with a with a bit of an overview. So, obviously, we saw, revenues as we've discussed in the EBITDA. We see the size of the business now when we look at that pro form a or run rate figure. Good commercial progress across the business, integrating the acquisitions well. Those products are growing nicely within our, UK business. And, we definitely see that the coming years of our business are real focused on organic growth. If you go back to the slides I set out earlier, you can see we have delivered organic growth over the last five years of, of well over 10%, and that will continue going forward. It's important for us to develop and build value in the brands that we have, and that will come through exploiting opportunities and spaces within The UK and Netherlands market where we sell direct into the retailers, but also internationally as we fill white spaces in the market. So the organic the organic side of the business and the growth is definitely a focus, and and we'll be, investing behind our products to achieve that. Obviously, 2021, we had the supply chain challenges. I think our businesses, worked very hard to manage those.

55:04 We've, as I've said, dealt with passing on price increases to customers. We've got customers also to order much further out so we can see that visibility. A question we get asked regularly is, you know, what's gonna happen to consumer demand in the autumn? Probably all of you on this call know just about as much about that answer as I do. But from our perspective, by pushing out all of our, customers to order further out, we see that visibility better. We know we've managed to pass some price increases already, so we expect to be able to do that. And I think we're in a good position to manage those, challenges as they come through. So, as a business, we've got, obviously, revenues across medical devices and cosmetics, and food supplements. I think the medical device changes give a real opportunity for us. I think that medical devices will become more valuable.

55:55 I think you'll see a lot of medical devices coming out of the space, as I've mentioned earlier, and that will increase the the value of people who retain those medical devices. I think, you know, weaker, smaller businesses will will suffer in these conditions and stronger, better funded businesses like ourselves will benefit from those. We see that as a as a positive going forward. So we're very, you know, happy with where the business is trading at the moment, how we come through '21 now into '22. Good good order book, good growing brands, and real opportunities within those So we finished our presentation now. We have been given some questions that were submitted in advance, and I noticed on the screen there's been some submitted through the course of the presentation. So we'll do our best in the time we've got to answer all of those for you.

56:46 I think Jerry, if I may, if I could just come in now. Thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions using the q and a tab situated in the top right hand corner of your screen. But just while the company take a few minutes to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. As Gerry said, we've received a number of pre submitted questions from investors, and I want to start the Q and A session with these. The first one reads as follows. Could demand for your products fall heavily if you have to raise prices? Thank you. I'm going to ask Sharon to cover this question. Yeah. I think the first point is that if we raise prices, it and I'm talking here in The UK, particularly with the the retailers, it doesn't always translate that they will pass that price increase on. And the example I'd give is with dental.

57:42 And as we mentioned already during the presentation, we had to initiate a price increase on dental. It went live January 1, and it went out to all retailers, all of which accepted the price increase. And it was quite a substantial price increase of 14%. And that was really just down to the increase in cost of goods to us. But not all retailers have passed that price increase on. The example I'd give is both Boots and Tesco's have actually maintained their price at £3.50 on dental despite the price increase. With ASDA, they've moved from £3 to £3.50. So they already had a lower price point to start with, and they've come in line with Boots and Tesco. Now there are other retailers, Sainsbury's, Ocado, for example, that have passed that price increase on.

58:37 So it doesn't always translate that if you raise a price, does that mean it's going to affect demand? Because in some cases, the retailers won't pass that that price increase on. The second point I'd like to mention is that all of our products, really have a need state, meaning that if you have if you suffer from low blood sugar, hyperglycemia, or if you've got bacterial vaginosis, you've got to buy a product to solve that issue, that problem. And so all of our products, really fall into that category, whether it's, for oral mucositis because you're undergoing chemotherapy or radiotherapy. So I think that, yes, prices will rise.

59:25 But I would say that, you know, our our exposure to sort of fall in demand is probably, slightly hedged because of the nature of our products. Thanks very much for that, Sharon. Just turning to the next question. Is the business an inherently high operating margin business? If yes, why? And what operating margin should the group target in the medium term? Danny, I'll ask you to cover this one, please. Yes, of course. So the business uses EBITDA as its key performance indicator. Feel we feel this best reflects the real underlying cash profit of the business as it strips out the noncash costs of amortization, depreciation, but but also also those costs which we classify as exceptional.

1:00:10 Last year, we had a significant level of exceptional cost related to the acquisitions, visor fees, professional fees. So when we look at EBITDA excluding those items, we did over just over 20% last year, 21. That was similar to the previous year. But we expect that number to increase quite significantly towards 25% over the next two to three years. This is very achievable for us mainly because we manufacture around 90% of our own products in house. That's through our sites in both Italy and Sweden. That enables us to achieve higher margins. And of course, the benefit of having that core infrastructure already in place as well as the operational support teams, the procurement teams, the commercial teams. It means that when we grow our top line revenues, this increases our operational leverage. And you saw earlier in the slide deck that we've got significant excess capacity in our sites in Italy and Sweden. So we're filling that and the incremental impact of that.

1:01:12 If we give an example, if we if we grow our top line around 10% on a revenue, we would expect that to translate to around 20% growth on the bottom line because there's very little investment needed below gross margin to fulfill that demand. Thank you very much for that, Daniel. That's great. I'm just moving on to the next question. Looking at cash generation, will you always see working capital outflows? Sure. Standing and Fred. Oh, yeah. Sure. Of course. Fair enough. So as a yes. Well, as a growing business, you would expect to see a working capital outflow. As revenue increases, so will our debtors, so will our inventory levels roughly in proportion with that revenue growth. As of today, our working capital is around 20 to 22% of revenue. That's a little bit higher than we would normally see it, but that reflects some of that inventory build that we are doing at the moment in light of the operating environments we are in. We are procuring materials and packaging much further in advance than we would normally because the lead times have increased so significantly.

1:02:20 But this will mean we can secure supply to our own customers. So we feel it's the right decision. So although some of that will unwind itself through the year, we would expect there still to be a working capital outflow across the year. So just to put that in context with our operating cash flow conversion, just to build on that point a bit, we we use operating cash flow conversion as a key performance indicator. This was just over 50% last year by reference to, EBITDA through to free cash flow generation. And that really and that that has actually come down a little bit if we look across the last couple of years. And it's been driven at the end of last year by that adverse working capital flux I mentioned at the end of December through strong q four customer billing. We had an outflow or an adverse impact of about three and a bit million from debtors increasing. And that cash collection came through in Q1 twenty twenty two.

1:03:14 So on a more normalized level of performance, we expect cash conversion to be around 70% of EBITDA. And we see that increasing over the next couple of years again because we've made acquisitions which have high cash conversion. BBI is a 90% cash flow conversion business. So overall, we move forward and we get towards that 40,000,000 plus mark on revenue, we should see free cash flow generation of somewhere around 4,000,000 to 5,000,000 and above that as we move forward. Thanks once again, Daniel. I'm just moving on to the next question which relates to acquisitions and asks, shouldn't the business be stabilized for a year or two before making any more acquisitions? Yeah. Sure. I'm happy to to take this question. So the acquisitions we made in 2021 are now fully integrated in the group.

1:03:59 They delivered growth in the second half of twenty twenty one. They're delivering growth in 2022. You know, we think they're well integrated. They they come in. The timing of those last year wasn't helpful. They were close together, but it's not always easy to control the timing of what m and a lands and and when it arrives. But we've we've significant significantly invested in the finance structures in the business. We've got in places, put a lot of investment into the team, boosted that team in The UK, boosted reporting function, and everything else associated. So we're much more structured now to be able to accommodate acquisitions. I think on top of that, what I would say is that what we're looking to acquire going forward from here, using the RCF at the moment because there wouldn't be any interest from us in an equity raise with the share price where it is now.

1:04:50 We'd be looking to put additional assets into the portfolio. So within the women's health there, we bounce active and what we have there. We'd be looking to put more products in there to have some horizontal build out of that portfolio in the same general area. Similarly, on the diabetes side, definitely get this part of the blood space in that therapeutic area. So we're looking at potentially acquiring one or two interesting additional assets to go in there, not businesses, not people, not infrastructure. And those can be integrated much more easily than requiring more businesses case of bringing the product team, getting us to commercial teams, and also transferring in the manufacturing. So we feel we've done a lot of work internally on structures. We've integrated the opportunities that we've made, and we continue to look at acquisitions at this time. That being said, obviously, in the current environment, we need to be more careful about the acquisitions that we look at because the future of those businesses is much harder to understand, predict, and forecast.

1:05:52 As we as we've said earlier, you know, there's concerns in the autumn. You know, are we gonna get continue escalating price when inflation continue here in The UK and abroad? What will happen to consumer demand? So in all those things, it does make the future look of a business more difficult to predict, and therefore, we'll be equally more careful in terms of how we look at those. Thank you very much. That does conclude the pre submitted questions. And as you can see, we received a number of questions throughout today's presentation. So thank you to all the investors for submitting those. But I I'd just ask you to read out those questions and give responses where it's appropriate to do so, and then I'll pick up from you at the end. Yes. Of course. No problem at all. We can have a number of questions. What I'm gonna try and do is pick on the ones where I don't think we've already covered the answer because you've had some questions where we've either in the presentation or subsequent q and a, we've we've picked up those answers. So I'll just look to the questions and and pick up what we can there.

1:06:52 So we've got one question which says, how far in advance do you have visibility of sales and how predictable is your sales cycle? So to answer that question, about 30% of our revenues come from The UK and The Netherlands business where we're selling direct to retailers, and they order on a weekly basis pretty much. So whilst we have joint business plans with them and general expectations of of what they'll be doing in the year, their orders come in weekly. So we don't have hardwired visibility of what they are, but we do know how sales are trending and tracking. We we follow Epos data and and therefore looking at difference between sell out and sell in. On the other 70% of our business, they are orders placed a lot further in advance because because all all that that product is made to order, whether it be for a VENTURE LIFE brand or whether it be for a customer brand. So typically, we had visibility visibility before out maybe three to four months on that.

1:07:47 But because of this new process we've gone through pushing out further, our customers are making them order earlier. We're going much further out now. So typically, we go as far as six or seven months with a number of customers. So we do have greater visibility. As I mentioned earlier, that's not not pulling pulling sales forward. That's in line with our growth expectations we have for the business, but we've got greater visibility of that going forward. And and I hope that answers that that question. The next question here. In view of the repeated delay caused by grants, will you be proposing a different auditor at the forthcoming AGM? Yeah. We've we've had difficulties with grant sources. I think to be fair to them, they've experienced similar difficulties to many of the firms. And and I'm sure many of the people watching today are invested in other companies that experienced delays.

1:08:41 I think we've had a particularly extended delay delay from Grant Thornton. And so that has made us look to review our auditor relationship. And you'll you'll see when you receive your AGM notice that there's not an AGM there to appoint the auditor because we're gonna go through a process of reviewing that relationship. Just going down. I think that's covered most of the questions we have. We we do have a question here. It's quite a long question, so I won't read it out in its its entirety. But someone asking why we we don't don't report quarterly performance, such as sales and EBITDA, which would give more confidence to shareholders.

1:09:30 Of course, I understand if, you know, if shareholders could have a a monthly set of our management accounts, they'd probably get more confidence about our business. But of course, as an AIM company, we're required to report our performance half yearly. That performance is reviewed by the auditors. That includes a process of going through order to review at the full year, full audit at the half year, more limited. We do give a trading update in July. We will give a trading update also in December. So we are reporting some level of trading update on a quarterly basis. And I think that should give shareholders some confidence about where we are. I think we've we've spoken extensively about our wider order book. We've spoken about the growth in our products that we've acquired. We've spoken about how we're managing managing the the supply chain issues. And of course, it's a very difficult time for everybody, but I think we're managing those well. We've got modest forecast in the market that we're comfortable with.

1:10:27 We're tracking where we want to be for the year. And and so despite all these difficulties, we've, you know, we're cautiously optimistic about the year. And at the same, nobody really knows what's gonna happen to consumer demand when we get to the autumn consumer confidence. But we think our products are well placed because of their need state positioning. I'm just gonna excuse me. Just looking through the the questions. There was a question about how will we attempt to monetize the fact that the dental mouthwash will prevent COVID for now. I think Sharon's already answered that, particularly particularly the Chinese market's keen to use that data. And if there's a spike in COVID again in this country or other European countries, we will cover that. Master, why do you believe the new Chinese distributor will be any better than the last?

1:11:15 What lessons have you learned in the disappoint from the disappointment of the last distribution partner? Sharon's outlined a bit of this, but I'll I'll cover a couple of points. Think the first thing is it's a UK based business. So to a large extent, our credit risk is reduced because we're trading with The UK business. We don't have any of the logistics issues of of shipping products to China ourselves. I I parked that separately from the Shanghai port issue, which I'll come back to. But we we ship the product from our warehouse in The UK to their warehouse in The UK, and they deal with logistics. I think they we don't have to deal with any of the people within within China. One of the difficulties with the old partner, apart from the the issues they had themselves, was communication.

1:12:00 We couldn't get over to China in the last two years. We couldn't sit face to face with a partner. Language difficulty is a difficulty in China. There's a a low level of English speaking. So I think all of those things are reduced difficulties for us. They have a great system, the Nomad system, which they deploy through ecommerce. And so far, the relationship has been very good. Now, obviously, as I mentioned, Shanghai Port is a bit of a mess at the moment. Our our product has come off the ship that we shipped earlier in the year, and it is in the port. But, obviously, once once the lockdown gets released in Shanghai, they can pick up that stock and start moving. So it's the data a little bit, but there's limited numbers built into the market numbers about this year. And, you know, we we feel very confident about about that partner.

1:12:46 Another another question is, are you likely to acquire another business in the financial year? I think I've answered this. We're looking at assets. Whether we do a transaction this year or into next year will depend on what we identify, whether we can satisfy ourselves about the the value value accretion that's gonna give us and whether it's the right time to make that acquisition. So I think the simple answer would be potentially yes, but I don't know any more than that. There was another question here. I think we covered cash generation, yeah, being organically focused. Oh, yes. There's a question here. Is VLG at risk of a takeover offer from private equity or or other buyer with its low valuation, reducing debt, and increasing growth prospects?

1:13:33 How will management react to such an offer? Yeah. I mean, it won't surprise any of the people on this line that, you know, people have have been been looking looking at at this us because because the the valuation is, you know, ridiculous. We understand why the valuation's here because there were some disappointments last year, and shareholders want to build confidence back in the share price compounded by the very difficult market conditions, and we and we completely understand that. As As a a management team, we have a significant stake in the business. And therefore, we have no interest at all in entertaining an offer that would be anywhere below the value of the business. Mean, we're trading at the moment at less than one times revenue and less than five times the EBITDA expectations for this year, which for a business in the consumer health care space is is, you know, derisory. As I say, we understand the capital market reasons for that, but the underlying value of the business is very strong. And there's no way we'd entertain, you you know, know, a silly offer or reduced offer. Ultimately, it's gonna be the decision of the shareholders, but certainly the feedback we have from all of our main shareholders is we've spoken to.

1:14:35 They'd not be interested in understanding either. There's growth prospects going forward for this business. You know, it's been a a tough couple of years for lots of people. We've invested on the business and our team and our staff and our resource to deal with the issues that came at us last year, and I think we're dealing with them particularly well. So, no, sort of the short answer is no. We won't be entertaining any silly offers for the business. And, you know, I would, you know, hope you take confidence in that in that reply. I think, unless I'm mistaken, we have answered all of the questions that were in the list. Jerry, yeah, you have. Thank you for that. I think you actually managed to address all those questions from investors. And, of course, the company will review all questions submitted today, and we'll publish those responses on on the the investor meet company platform.

1:15:21 But just before redirecting investors to provide you with their feedback, which is particularly important to the company, Jerry, could I just ask you for a few closing comments? Yeah. Sure. I mean, first thing, you know, the the the the investor the meets platform. Thank you for hosting us. Do get retail shareholders who who will just pick up the phone or email me, and and I welcome that. You know, any of you want to get in touch directly, you know, call the office, email me. I'm very happy always to answer questions as all of us all meet or, you know, update you. So, you know, I'd encourage you to do more of that. I think the platform's great because it gives us a chance to hear your questions and your concerns. I think like every company who you you approach or speak to the moment, it's a difficult time. There's no question about that. It's not just in our space. It's not just in The UK. It's everywhere. So, you know, we understand that concern. But I I would say, you know, the business is generating cash. It's well placed. It's got low levels of debt. It's got great growing products.

1:16:22 We've got a diverse platform of products across many territories. Organic growth is the real focus for us in the business, and we're driving that very hard. We've got a new chair who's come into the business. Paul McGreevey joined us recently. Vast experience in international, growth and development and innovation around consumer products, and he's already beginning to have an impact on the business and how we work. So we're very positive about the future. We think we're doing a good job in a difficult environment. I think the space is strong. I think you're gonna see a move going forward to more and more self diagnosis and self treatment. We see in this country massive delays in the in the NHS and and obviously people getting elective treatments going back and back and back. So that's exactly the space we're in, the products with strong positions in a need state market. So we feel very positive about the future, and I think we're very resilient and robust in dealing with that.

1:17:15 So thank you for your support, shareholders. Thank you for your questions. Any of you come out to Italy or Stockholm or even, I can say, beautiful Bracken, you're always welcome to come and see us. That's it. Thank you for your time, and we hope to see you again soon. Yes. Jerry, Daniel, Sharon, thank you very much for updating investors today. Can I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few moments to complete, and I'm sure will 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.

1:18:02 Thank you.