23 September 2021

 

VENTURE LIFE GROUP PLC

 

("Venture Life", "VLG" or the "Group")

 

Unaudited interim results for the six months ended 30 June 2021

 

Venture Life Group plc (AIM: VLG), a leader in developing, manufacturing and commercialising products for the self-care market, presents its unaudited interim results for the six months ended 30 June 2021.

 

Financial Highlights

 

·    Revenues £13.9 million (2020: £16.9 million)

·    Gross margin £4.9 million (2020: £6.9 million), gross margin percentage 35.6% (2020: 40.9%)

·    Adjusted EBITDA[1] £1.9 million (2020: £3.5 million)

·    Profit before tax, amortisation and exceptional items £1.3 million (2020: £2.7 million)

·    Adjusted profit per share[2] 0.83p (2020: 2.85p)

·    Cash at 30 June 2021 £7.9 million (31 December 2020: £42.1 million)

 

 

Commercial Highlights

 

Group

·    Two immediately earnings enhancing acquisitions (one post period-end), expected to bring significant growth in revenues and profitability and fully deploying funds raised in late 2020

·    Revolving Credit Facility (RCF) in place for up to £50 million giving significant firepower for further earnings accretive M&A

·    Core business revenues (excluding China and Hand Sanitiser Gel) up 10% in first half of 2021

·    Continue to sign new deals and launch products

 

Acquisition of BBI Healthcare Limited, 4 June 2021:

·    Three new brands and therapy areas: women's health, hypoglycaemia and energy management

·    Two significant acquired partners - Bayer Consumer Care AG, for women's health and Swiss Precision Diagnostics GmbH ('SPD')

·    Immediate cost synergies realised

·    Significant free manufacturing capacity in Sweden

·    Profitable with good growth opportunities

 

Acquisition of Helsinn Integrative Care Portfolio - post period end, 6 August 2021

·    3 new brands and new therapy area of oncology support

·    Profitable portfolio

·    33 new partners in 56 countries

·    Geographic extension opportunities plus New Product Development opportunities, particularly for Pomi-T

 

 

 

Jerry Randall, CEO of Venture Life Group plc commented: "I am very pleased to have completed two fantastic earnings enhancing acquisitions, utilising the money shareholders gave us at the end of 2020 for exactly the reason it was intended. It was particularly satisfying to close the BBI acquisition within 6 months of receiving the cash from shareholders given the challenges presented by the significant cross border aspects during COVID times when we were unable to travel.  The fact that we managed to complete such a transaction in the timeframe is testament to the fantastic effort of all our team at Venture Life and their ability to assess and transact this deal in a smooth, effective and quick manner, whilst continuing to manage the existing business. The strategy of raising cash in advance has been vindicated as it enabled us to access this acquisition and I thank each and every one of our shareholders who supported us in that fund raise.

 

Integration is well underway for both acquisitions and we have already achieved a number of immediate cost synergies. The second half of the year will see the benefit of the impact of these two earnings enhancing acquisitions, with 2022 seeing the benefit of the full year effect and more synergies, as both of these exciting acquisitions are expected to add meaningfully to the revenues and profitability of the Group going forward.

 

The addition of the RCF is another excellent result for our team, giving us up to £50 million of non-dilutive firepower available to us for more earnings enhancing acquisitions and we continue to assess potential opportunities in this regard. 

 

COVID has continued to impact our business, and to impact some customers more than others. We are, however, seeing an improving situation going forward.  The disappointing performance by our Chinese partner is a demonstration of how COVID has impacted some of our customers, and this is something every business is affected by in some way at this time. As with all our customers we continue to support them through difficult times, to resolve the situation one way or another. The supply price increases that have impacted our first half gross margin are now beginning to be mitigated as we pass these costs on to customers. However, to still see continued growth in our core business (excluding China and HSG), and our current order book ahead of the same time last year on both an actual and like for like basis, underlines the resilience of our business in difficult times.

 

2021 has been another transformational year for the Group, operating in a difficult environment but still driving the business forward. I must express my thanks to the whole VLG team for continuing to do a fantastic job in these times, to drive the Group to being a much more substantial business in 2022 than it was at the start of 2021."

 

 

 

 

 

For further information, please contact:

 

Venture Life Group PLC		+44 (0) 1344 578004
Jerry Randall, Chief Executive Officer
Cenkos Securities plc (Nomad and Joint Broker)		+44 (0) 20 7397 8900
Michael Johnson / Russell Kerr (Sales) Stephen Keys / Camilla Hume (Corporate Finance)
Singer Capital Markets (Joint Broker)		+44 (0) 20 7496 3000
Jonathan Dighe (Sales) Shaun Dobson / Alaina Wong (Corporate Finance)

About Venture Life (www.venture-life.com)

Venture Life is an international consumer self-care company focused on developing, manufacturing and commercialising products for the global self-care market. With operations in the UK, Italy, The Netherlands and Sweden, the Group's product portfolio includes some key products such as the UltraDEX and Dentyl oral care product ranges, the Balance Active range in the area of women's intimate healthcare, the Lift and Glucogel product ranges for hypoglycaemia, Gelclair and Pomi-T for oncology support, products for fungal infections and proctology, and dermo-cosmetics for addressing the signs of ageing. Its products are sold in over 90 countries worldwide.

 

The products, which are typically recommended by pharmacists or healthcare practitioners, are available primarily through pharmacies and grocery multiples. In the UK and The Netherlands these are supplied direct by the company to retailers, elsewhere they are supplied by the Group's international distribution partners. 

 

Through its two Development & Manufacturing operations in Italy and Sweden, the Group also provides development and manufacturing services to companies in the medical devices and cosmetic sectors.

 

 

Non-Executive Chair's and Chief Executive Officer's Statement

 

Overview

The first half of 2021 has seen the Group make the largest acquisition in its history, utilising the funds raised through the placing and open offer in December 2020. The subsequent closing of a Revolving Credit Facility (RCF) of up to £50 million at the end of the first half has added significant fire power, in addition to future surplus cash generation, to effect further earnings enhancing acquisitions to continue the growth trajectory of the business through the rest of 2021 and beyond. This trajectory continued further post period end with a second smaller acquisition.

 

The Group has employed a strategy of combining organic and acquisitive growth since listing on AIM in 2014, achieving a compound annual revenue growth rate of 27% from 2014 to 2020, despite this last year being the first year of the COVID 19 pandemic.

 

This strategy has focused on the dual revenue streams of those from VLG's own brands and those from products sold under customer brands, where the velocity and strength of customer brands generates meaningful revenues for the Group. Our development and manufacturing facility near Milan, Italy, produces the vast majority of all the Groups' products. Since 2014, we have invested in the facility, to keep a bow wave of capacity ahead of us to accommodate anticipated growth. The available capacity will enable the Group to deliver the growing revenues it sees from both organic and acquired growth.

 

The acquisitions made so far this year are expected to add materially to the Group's revenues and profitability in the second half of the year, as the revenues of the products are included in Group revenue, and we access immediately available cost synergies.

 

2021 has seen a continuation of the COVID 19 pandemic, which has impacted a number of our customers in this first half, and significantly impacted supply chain prices, as has been widely reported in many sectors. We are, however, seeing signs of recovery as the year progresses, as we harness the opportunity to pass price rises on to customers for new orders and we start to see a recovery in retail activity. Revenues in the first half of the year were £13.9 million, compared to £16.9 million for the first half of 2020 primarily as a result of lower hand sanitiser gel ("HSG") and a reduction in sales of Dentyl in China. The newly acquired BBI Healthcare Limited ("BBI") contributed revenues of £1.1 million in the period since acquisition to the end of June 2021.

 

Aside from the lower HSG and China revenues detailed below, and excluding the additional revenues contributed by BBI, the rest of the Group showed revenue growth of 10% in the first half of 2021 compared to the first half of 2020.

 

The largest part of the reduction in Group revenues compared to the same period in 2020 arose from the expected reduction in the revenues arising from Hand Sanitising Gel. In the first half of 2021, revenues for HSG were £0.1 million compared to £3.2 million, as a result of significant stockpiling built in 2020 as the pandemic took hold and have not yet unwound from retailers. Retailers still hold significant stocks of HSG and it is taking longer than expected for these to be utilised, and hence the reduction in revenues from HSG is H1 2021 was more than we expected at the start of the year. Nonetheless, we still expect to make some sales of HSG in the second half of the year albeit, given the stock holding situation in retailers, we expect H2 HSG sales to be at a level similar to that seen in the first half.

 

Sales by our Chinese partner were lower than anticipated, as they continue to struggle to recover from the impact of the pandemic, with sales only £0.2 million in the first half of 2021. They have however continued to pay down their debtor balance such that as at 30^th June 2021 it stood at £0.4 million.  Despite failing to meet the minimum purchase obligations under the long term agreement we signed with this partner in 2020, they still indicate to us that they expect to take all of the product orders we have on hand from them (placed in 2020) of €4.0 million. However, the timescales for taking delivery of the products under these orders have not been set out clearly by the partner, and so we continue to be in discussion with them to understand whether they are able to perform in accordance with the contract. At the same time, we are undertaking a review to ensure that our products are exploited in China to their full potential, but for prudence they have already been significantly downgraded in market guidance.

 

Notwithstanding the growth in our core business revenues, gross margin in the first half was impacted by various factors.  These margin impacts, described below, are considered as transitory and we expect gross margin to be improved by the end of 2021, with a much better second half for gross margin. This has meant a significantly lower gross margin percentage in the first half of 2021, where we achieved gross margin of 35.6% compared to 40.9% in the first half of 2020. In comparison to 2020, the gross margin reduction has come from a number of factors:

·    Supply chain cost increases have been seen in the first half of 2021, as has been seen widely across many sectors, and have been higher than anticipated at the start of the year. As these came through, we have sought to pass these on to customers, and on the whole customers have been receptive to this. However, these price increases agreed with customers only impact new orders placed and not those already on hand, and so there is a transitional effect of supressing margin particularly in the first half, until the new orders come through. We expect the effect of agreed price increases with customers to positively impact margin in the second half of the year and into 2022 and beyond.

·    Increased stockholding cost for the higher level of inventory held for Brexit and COVID supply chain concerns. In order to ensure continuity of supply as the UK exited Europe, the Group held significantly higher levels of finished goods inventory in the UK at the end of 2020, in case there were issues with transport into the UK. Similarly in Italy, the Group has held higher than normal levels of raw materials and packaging stock to ensure that it can continue to supply customer orders and not be at risk to supply chain interruption, and also where possible to buy these inventories ahead of price increases. These costs will reduce as we seek to unwind the higher inventory levels through 2021 and into 2022.

·    Slightly lower overall levels of production activity (due to lower HSG and China sales) have an impact on the overall margin.

·    The high level of high margin HSG sales in the first half of 2020 have not repeated in 2021.

 

Whilst this impact on gross margin from supply price increases has been disappointing and higher than anticipated at the start of the year, we now have good visibility on this and the ability to pass this on to customers in a challenging retail environment. Also, the acquisitions made so far this year each have materially higher gross margins than the Group average and will add meaningfully to the gross margin percentage for the Group going forward.

 

The Group continues to keep overheads closely under control, and lower levels of COVID associated costs in the first half have mitigated some of the shortfall in gross margin, delivering adjusted EBITDA for the first half of the year of £1.9 million, lower than the £3.5 million in the first half of 2020, primarily as a result of lower revenues and gross margin.

 

Acquisitions

 

BBI

BBI Healthcare Limited ("BBI") was acquired on 4^th June 2021 for an enterprise value of £35 million, with an additional £1 million deferred subject to achieving registration approval of a product in the USA. BBI is a consumer healthcare business with commercial operations in the UK and its own development and manufacturing facility in Sweden. It has products in three therapy areas:

·    Women's health: key product is Balance Activ, for the treatment of bacterial vaginosis ("BV"), the no.1 BV brand in the UK, by volume, and also other women's health products, e.g. a fertility gel. This provides a platform for women's health brands the Group can expand.

·    Diabetes: Glucogel, the no.1 prescribed glucose gel in the UK

·    Energy management/diabetic care: Lift, with dual positioning for sports performance and OTC management of hypoglycaemia

 

This acquisition has high strategic value for VLG, not only as a growing and profitable business in its own right coming into the Group and with meaningful cost and revenue synergies available, but also establishing VLG in the new high interest areas of Women's Health and Diabetes/Energy Management. BBI and its subsidiaries, previously headquartered in Crumlin, South Wales, has a manufacturing facility in Gnesta, Sweden and employed 21 people across the UK and Sweden. There is significant unused manufacturing capacity in the Gnesta facility currently.

 

The integration of the business is well advanced with a number of the immediate cost synergies already actioned, along with plans for maximising the synergies with the Group looking forward.

 

Post period end, we received ANVISA registration approval in Brazil for the BV Gel, and launch is expected in 2022.  The online channel is also a key component within the business and as well as launching on Amazon in the UK in 2020, Balance Activ will launch on Amazon in Germany and a re-launch will take place on Amazon in the USA in early 2022.

 

In the UK, we are exploring the convenience sector for Lift, with opportunities already emerging.

 

Helsinn

The Acquisition comprises three on-market products within the area of oncology support, as well as all the associated IP and existing customer relationships in relation to the Brands.

 

The three on-market products are:

·    Gelclair - a muco-adhesive oral rinse gel used for the management of painful symptoms of oral mucositis (side effect of some cancer therapies). Gelclair is a registered medical device and is currently partnered in 38 countries;

·    Pomi-T - a Polyphenol rich mix of wholefoods used for the management of prostate specific antigen (PSA) levels in prostate cancer. Pomi-T is a registered food supplement and is currently partnered in 22 markets; and

·    XonRID - a Hyaluronic acid based topical gel used for the prevention and treatment of radiation induced dermatitis. Xonrid is a registered medical device and currently partnered in 21 countries.

 

Since the acquisition in early August 2021, integration of the business has been ongoing with all partners being contacted and transfer of the commercial operations into our UK team. It is very early days since the acquisition, but opportunities are now being explored in key markets such as the USA for the two key brands.

 

Venture Life Brands

 

Dentyl

 

Dentyl revenues for the first half of 2021 were adversely affected by the lack of China business, and so stood at £1.4m in H1 2021 compared to £2.8m in H1 2020.

 

Despite the extended lockdown challenges in the UK market in H1 2021, revenues were up 11% to £1.12m (H1 2020: £1.0m), which contributed to an overall 4% growth in our oral care brands in the UK market.  In addition Dentyl remained the fastest growing brand in the oral care sector in the last 12 months^[3], ahead of other major brands such as Corsodyl, Colgate and Listerine.

 

H1 2021 saw new launches in some Value Retailers, such as Home Bargains and B&M Bargains, further extending our reach within all aspects of the UK market.  In addition, we retained full distribution in ASDA, and they also launched the newly developed Dentyl Dual Action Unicorn Edition into 361 stores, despite ASDA cutting their current oral care range by 30% in the June range review.  Ocado, an existing partner, is also expected to launch a new flavour variant in August.

 

As mentioned earlier, sales of Dentyl to our Chinese partner proved to be disappointing in H1 2021 compared to H1 2020 and compared to the Distribution Agreement signed in April 2020.   Whilst supporting them as we would any partner, we are carefully reviewing our on-going business with them, and thus reviewing our options to ensure we realise the full value of the brand in China.

 

The in-vivo study at Cardiff University on Dentyl completed in April 2021 and is under peer-review and we await the results which we expect  to be published shortly.

 

UltraDEX

UltraDEX revenues for the first half of 2021 stood at £1.02m (H1 2021: £1.72m). In the UK, UltraDEX was less affected by the extended lockdown and finished the first half of 2021 at £0.96m (H1 2020: £0.99m), a 3.3% decrease.  During the period UltraDEX continued to take market share from its nearest competitors and is now the largest brand in the medicated fresh breath mouthwash category in the UK.  In the 52 weeks to the end of July 2021, it reached a 52% market share of the category, compared to its main competitor CB12, which stood at 37% for the same period[4].

 

Internationally UltraDEX revenues were affected also by the poor performance of our Chinese partner (same as for Dentyl) which took its first orders of UltraDEX in the first half of 2020, but as with Dentyl has not repeated this levels of sales in 2021.

 

PharmaSource

PharmaSource saw a 3.1% increase in H1 2021 to £1.48m (H1 2020: £1.43m), despite the extended lockdowns in The Netherlands.  Integration is now completed, including the manufacturing transfer from a third party to our Italian facility.  Despite not being able to travel to our offices in The Netherlands for over 1.5 years, the team remains committed to ending the year above 2020.

 

Venture Life - other brands/products

We signed a total of 6 new long term distribution agreements during H1 2021.

 

As mentioned, one key significant agreement was reached with Bayer Consumer Care AG following acquisition on the BV Gel product, extending the term until 2030 and adding a further 16 new territories, including Poland and Turkey - all major markets around the world are now included in this agreement, which stands at 49 territories in total.  At the same time, we also added a further 39 new territories into the BV Pessary agreement, which included Brazil, France, Germany, Italy, Spain among others - all major markets around the world are now included, which stands at 51 territories in total.

 

Furthermore, H1 2021 saw our partners launch 11 new products in their respective markets, as well as 3 regulatory approvals granted and 14 new launch preparations underway in H2 2021 for a Q1 2022 launch.

 

Customer brands

 

The customer brands business delivered revenues in the first half of £8.5 million, an increase of 12% over the first half of 2020. As with the rest of the business we saw some partners recovering better than others from the COVID pandemic, but overall this part of the business delivered good growth. There were two significant pieces of new business that contributed to this growth:

·    A new dermatological line was developed for the Italian pharma business Alfasigma S.p.A in 2020 and production began in that year. The first half of 2021 saw a significant increase in our revenues for this range and this is set to continue in the second half.

·    An existing customer Italfarmaco S.p.A began a new piece of business with us in 2021 that has also positively impacted in the first half.

 

In addition we continue to attract and win new product development business for the EU, USA and other territories, in the areas of medical devices and cosmetics, and these items of new business will continue to deliver growth in our customer brands business.

 

Our Biokosmes facility in northern Lombardy manufactures the majority of our products, both customer and Venture Life brands, and the investments made in 2020 have given us meaningful spare capacity to continue to accommodate further revenue growth. Through the lockdown in the first half of 2021 the factory again continued to operate all the time, again a fantastic effort by all the team at Biokosmes.

 

Revolving Credit Facility

On 21^st June 2021, the Group entered into a Revolving Credit Facility ("RCF") with Santander UK PLC and Silicon Valley Bank with available borrowing of up to £30 million and an incremental facility available of a further £20 million, subject to certain conditions, on the same terms as the RCF.

 

As at 30^th June 2021, the amount drawn was £4 million, to replenish working capital cash reserves used in the acquisition of BBI. In the coming weeks another £4 million will be drawn, which together with surplus cash will be used to repay the £5.2 million of Italian bank loans, which is a condition of the RCF.  The remainder of the facility will be kept available for future acquisitions, in addition to the future cash generated in the business moving forward.

 

Outlook

The first half of 2021 was a challenging trading environment for the Group, as another extended COVID lockdown affected customers and suppliers in many countries. Despite this, the Group saw growth in its core business revenues (excluding HSG and China) with the current order book ahead of the same time last year on an actual and like for like basis, and two immediately earnings acquisitions (one post period end). These acquisitions are expected to add materially to the revenues and profitability for 2021 and the future, as well as providing new therapy areas and products for the Group to expand and develop further. The acquistions bring significant opportunity for geographic expansion and new product development, as well as expanding the reach into the UK retailers.

 

From 2014 to 2020, the Group successfully achieved 27% CAGR in revenue through the dual strategy of organic and acquired growth, which has driven increasing profitability in the Group. The Group is well set for continued growth, as we expect the second half of the year to benefit from the consolidation of the recent acquisitions, and the full year effect will be seen in 2022 and beyond. VLG has significant capacity in its manufacturing operations to accommodate growth in revenue and has now added significant additional resources (substantially unused) with the RCF in place for further earnings enhancing acquisitions, all of which gives the Board great confidence about the future.

 

Financial Review

 

Statement of comprehensive income

 

Group revenue for the six-month period was £13.9 million, a decline of 18% on the £16.9 million reported for the same period in 2020. The movement had four main drivers comprising:

a.    continuing growth and momentum from the core business (excluding sales of Hand Sanitiser products and sales to China);

b.    inclusion of £1.1 million of acquired net sales pursuant to the acquisition of BBI Healthcare Ltd on 4^th June 2021;

c.     90% decline in sale of products to China impacted by Covid-19;

d.    98% decline in sales of Hand Sanitiser Products, which was far greater than expected and due to significant inventories remaining in channels and other factors;

As a result of these dynamics, the revenues of the VLG Branded segment of the Group declined to less than those of the Customer Brand segment.

 

The Group generated gross profit of £4.9 million representing a gross margin of 35.6%, compared to 40.9% for the same period in 2020. This notable decline was a blend of several factors including:

a.    favourable mix variances arising from the inclusion of BBI Healthcare Ltd products at a higher average margin;

b.    unfavourable mix variances arising from the lower portion of revenues arising from VLG Branded products;

c.     unfavourable factory volume variances due to the decline in overall sales volume;

d.    inclusion of higher storage costs arising as a result of the higher inventory levels which had arisen due to a blend of commercial reasons including the group's mechanic to hedge any supply disruption arising through Brexit;

e.    some inflation in raw materials costs which have not yet been passed on via price adjustments to customers;   

Administrative expenses decreased in the period to £4.5 million from £4.6 million in H1 2020.  General savings of £0.2 million were offset by £0.1 million of new expenses relating to the inclusion of BBI Healthcare Ltd operations, and £0.2 million of higher non-cash costs of amortisation, depreciation and share-based payments (which arose from the BBI Healthcare Ltd acquisition and factory capital investment) were offset by a credit of £0.2 million representing the partial writing-back of the bad debt provision associated with our China distributor as the cash settlements and overall prognosis of the level of impairment of this receivable improved.

 

H1 2021 generated a positive adjusted EBITDA (defined as EBITDA excluding share-based payments and exceptional items) of £1.9 million, down 45% compared to H1 2020 of £3.5 million. The decline of adjusted EBITDA in the amount of £1.6 million versus H1 2020 is less than the decline in operating profit as a result of higher amortisation and depreciation charges in 2021, and this measure is stated before exceptional costs of £0.7 million (H1 2020 £0.1 million) which were high due to the significant progress on acquisitions during the first half of 2021.   The loss after tax was £(0.5) million (H1 2020: profit of £1.6 million). Loss per share was (0.37)p (H1 2020: profit of 1.86p). The adjusted profit per share (defined as earnings per share before amortisation, share based payments and exceptional items) was 0.83p compared to an adjusted profit per share of 2.85p in H1 2020.

 

A negative working capital flux of £(1.7) million (negative flux £(2.4) million in 2020) arose across the six month period. This was principally driven by trade debtors in 2021 and reflects the overall increase in the Group's portfolio of business pursuant to the acquisition of BBI Healthcare Ltd on 4^th June 2021.  The anticipated favourable flux that was expected to arise as a result of an unwinding of the high inventory level had not yet happened by 30^th June 2021 and like-for-like inventory levels remain unchanged versus 31^st December 2020 plus the inclusion of £1.3 million of acquired inventory pursuant to the acquisition of BBI Healthcare Ltd.

 

Net cash from operations was £(0.9) million in H1 2021 (H1 2020: £1.0 million). Cash used in investing activities amounted to £36.4 million (H1 2020 £6.6 million) and comprised the purchase consideration for the acquisition of BBI Healthcare Ltd (£35.9 million) plus some ongoing capital investment into the Italian factory. Net cash from financing activities was £3.1 million (H1 2020 £1.0 million) as the Group made an initial £4.0 million net draw from its newly established a revolving credit facility ("RCF") as well as some partial repayments of existing Italian debt and advance settlement of RCF set-up fees. The RCF was established on 18^th June 2021 across two banks and gives the Group access to £30 million of low-cost debt finance with an uncommitted option to extend this up to a total of £50 million. Overall cashflow over the period was an outflow of £34.2 million (H1 2020 outflow of £4.6 million) and net debt increased from £(1.6) million to £(6.0) million including Finance Leases (or declined from £0.8 million of net cash to £(1.2) million of net debt excluding Finance Leases).

 

Non-current assets including Goodwill increased by £40.1 million, reflecting the acquisition of BBI Healthcare Ltd in June 2021 and the significant investment in factory equipment underway as part of the plans to expand production capacity well ahead of the current forecast demand. Total debt increased from £8.2 million to £13.9 million and reflects the inclusion of the RCF, some extensions to factory and logistics centre finance leases less some repayments of Italian loans.  The balance of Italian loans at 30th June 2021 amounted to £5.0 million and has been classified by the Group as short term to reflect the requirement to repay this in the near term and utilise the RCF as the source of debt financing.

 

This has been a positive six-month period for the business which has experienced elements of organic growth as well as completed the acquisition of BBI Healthcare Ltd whilst adapting and broadening the portfolio of business activities to accommodate the impacts of two lines of sales decline. The balance sheet remains strong and the Group has access to low-cost debt finance to progress the development of its business, continue to invest in its manufacturing capacity and further deliver on its acquisition strategy.