SkinBioTherapeutics plc (5KW.F) Earnings Call Transcript & Summary

Hello. You're watching Proactive. I'm joined by Stuart Ashman. He's Chief Executive of SkinBioTherapeutics. Stuart, very good to speak with you. Can you give a quick introduction to shareholders about SkinBioTherapeutics?

Certainly. SkinBioTherapeutics is a life science company that focuses on very specifically on skin health. Our underlying strategy focuses on a proprietary technology, which we call SkinBiotix, and that harnesses the microbiome to promote wound healing, reduce the risk of infection and looks at how skin looks, how it feels and more importantly, how it repairs itself from infection and injury. Our foundation businesses are targeted, the skin health care via 5 pillars, the most advanced of which are the cosmetic skin care pillar, which we call SkinBiotix and then food supplements that harness the gut skin access, which we call AxisBiotix. The cosmetic pillar has a partnership with Croda PLC, where SkinBiotix is being used as an active skin ingredient with the Croda trade name of Zenakine, which was launched in April of this year. And then the AxisBiotix pillar has 2 lines of products targeting acne and psoriasis skin conditions, and that's been sold directly via Amazon and post year-end, it was launched on the high street in selected super drug stores. Second part of the strategy, which we introduced in 2022, is based on our ambition to be a consolidator in the sector, the skin care sector. And basically, we bought in the last financial year, a company called Dermatonics. We were a specialist dietary product, innovative topical dermatology products in skin care and wound care. And then in this financial year, we bought a company called Bio-Tech Solutions, and they are very well-established products of the same sort of thing that Dermatonics sell. We're listed on the AIM market, and we're based in Newcastle upon Tyne.

Give us a quick overview of the years? What were the highlights?

2025 -- '24, '25 has been a massive year for SkinBio. It included product launches, partnerships and huge financial building and building of stability. We launched Zenakine was launched by Croda to the cosmetics industry in the spring of this year. We signed an exclusive agreement, as I mentioned earlier, with Superdrug around 2 product lines for acne and psoriasis in the AxisBiotix space. And then we acquired Bio-Tech Solutions in October that contributed 9 months to the financials, plus a full year from Dermatonics, which we acquired in the last financial year. And at the financial level, we've achieved pretty much exactly what was expected by the market, 284% increase in revenue to GBP 4.6 million, a 319% increase in gross profit and a 62% reduction in operating losses.

Let's start with SkinBiotix, our house branded by Croda as Zenakine. Tell us about the launch. Any news about products in the market containing the ingredient and how sales are going?

Yes, that's a difficult one to answer, Stephen. As we've stated before, we're under a very strict confidentiality agreement with Croda as they are with their partners who are the biggest cosmetic brands in the world. And because of that extremely competitive nature of the cosmetics industry, we're bound by quite a tight confidentiality agreement. What I can say is it's a royalty-based revenue for us. I can say that Zenakine was launched in April at the in-cosmetics show. It continues to draw extremely positive responses. It just recently won an award at the in-cosmetics show in Asia as a bright emerging product. It's very -- Croda is very publicly promoting the product to its customer base via social media, its website and PR. And with respect to products being launched that include Zenakine, the cosmetic companies are clients of Croda, not ourselves. We own the technology, which we've licensed to Croda. Therefore, we'll only know when those new product launches are made public when everybody else does.

Our sales of AxisBiotix going in the Superdrug stores, Stuart, when will you be able to provide a reliable forecast of sales?

Just before the end of 2025, we signed that exclusive 2-year commercial deal with Superdrug to launch AxisBiotix for both psoriasis and acne. And despite very tight deadlines to manufacture that product and get it into their warehouses, we managed to hit that deadline, and it was basically delivered to them on time. It went into a selection of 180 stores that are prevalent for people who buy medicated skin care. So it rolls out into further stores throughout the course of next year. And it's still very early days, but our updates from Superdrug are regular. They're very frequent, and we've been given extremely positive feedback, and we look forward to the next stage of the launch next year, which rolls out, as I said, into further stores.

And the new additions to the group, how are they doing? Let's start with Dermatonics.

Yes. Dermatonics produced those products that I talked about earlier. We acquired it in January 2024 as part of our strategy to seek accretive opportunities outside of our core business. And it's the first time that we've had a full 12 months of financials here. Revenue was GBP 2.2 million in the full 12 months, EBITDA of GBP 0.5 million. And that was just slightly lower than we were expecting, and that's partly down to the timing of orders. Had the financial year come a little bit later, we would have been bang on target. But we've had an excellent start to the financial year there given the timing of those orders have slipped into this year. We're very, very pleased with the investment that we've made there. It's a great company, and we're expecting great things to come out of the partnership with Umesh Modi in India, and that's going very well indeed. So yes, very pleased.

So what was about BTS and your investment plans for BTS?

We bought Bio-Tech Solutions in October of 2024 for GBP 1.25 million. It's a very well-established manufacturer supplier of health, hygiene, personal care products. And the rationale for buying that business was to bring in-house those manufacturing capabilities. So the products that Dermatonics were buying from a third party and most of them are now being manufactured in-house with Bio-Tech Solutions. So we're keeping that very much in the family. It reported revenues of GBP 1.4 million and an EBITDA of GBP 100,000, which was slightly lower than expectation, and that's very much again due to timing of orders, which occurred post year-end. And also the timing of the acquisition was a little later than we had intended. And that integration has taken a little bit more time than we thought, but we are now fully up to speed, and they've had a stunning start to the year, very, very pleased indeed with their progress. And part of the fundraise that we did in June, we're using part of that funding to increase the capability there to bring that up to -- smack bang up to speed and standard and bring it to new technology, which will assist in the AxisBiotix product, putting those products into tablets and pills and making that more usable and easier for consumers to take that product. So yes, very, very pleased indeed.

So how is current trading going?

Very pleased with current trading. As I said before, the -- in terms of the start of the year, it's been stunning. We've had a great start of the year. We anticipate another year of strong growth from direct and indirect sales, very much in line with market expectations. We think we're going to come in at GBP 6.2 million and an adjusted EBITDA of positive GBP 700,000. So yes, very, very pleased indeed with the progress of the group so far.

There are a few changes going on at the leadership and Board level. Stuart, do you want to briefly say something about this?

Yes. There's been a bit of movement within the senior team. We saw the appointment of Dr. Surinder Chahal from Croda. After 37 years, he came to join us an adviser. Emily Bertram joined the group as Group Finance Director. She's previously been with us on a secondment as Finance Controller. And I'm delighted to say that in the early part of next year on the 1st of January, Emily will be promoted to Chief Finance Officer, which is very, very well deserved, and I'm delighted to see her in that role. We're also -- another financial powerhouse that we're bringing in is the appointment of Alyson Levett. She's coming in as a new Non-Exec Director and Chair of the Audit Committee. So Emily and Alyson will be working very closely together to tighten up that audit and keep that finance function performing as strong as it has.

Any closing points, Stuart, including what we can look forward to hearing about in full year '26?

Yes. I sort of repeat that it's been a really important year of evolution for the group. I'm very pleased with the performance that we've had. We strengthened our relationship with Croda. We've seen Zenakine launch. We signed that partnership deal with Superdrug. We've integrated -- fully integrated those new acquisitions of Dermatonics and Bio-Tech. I'm very proud of the very small team of hard-working and dedicated individuals that I'm so happy to be a part of. The start of the new financial year has been extremely busy. We've seen the launch of those 2 products with Superdrug. We'll also be seeing a new generation of cosmetics or cosmeceuticals, as Croda calling them with Zenakine included. And yes, we think '26 will be a very important year for strong growth, and we're on track -- very much on track to achieve market expectations of profitability and EBITDA. So yes, very happy indeed, could be happy.

So thank you very much for taking the time to speak with us today.

Thank you, Stephen.

Stuart Ashman is Chief Executive of SkinBioTherapeutics.