Venture Life Group plc (VLG) Earnings Call Transcript & Summary

Good morning, and welcome to the Venture Life Group plc Investor Presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to Jeremy Randall, CEO. Good morning, sir.

Good morning. Thank you very much. Good morning, everybody. Thank you for joining our presentation. And you'll here today with me, Jeremy Randall, CEO [indiscernible] of the business; Danny Wells, our CFO, who joined us a number of years ago. I think you've all heard from us before, and we're going to take you through the presentation for our results for the year ended 31st December 2024. As per usual, any questions you submit along the side as we go through the presentation, we'll endeavor to answer in the time we have on this call. So really happy to present our 2024 results. You will have seen in the results announcement that we've exchanged contracts on a divestment of the business. And as we go through the results, both the presentation here and also the RNS that you will have seen and in the annual report, those discontinued operations are split out. So you'll see us referring to continuing operations, divested assets discontinued, et cetera. So just bear that in mind as we go through. And as I say, any questions at the end, happy to clarify. If we look at the whole group to start with, including the business that we're divesting, total revenue 51.5 million, gross margin up 42% compared to 39% last year, adjusted EBITDA 11.4% and adjusted EBITDA margin of 22%, slightly down from last year. But then if you look at the continuing business as we go forward after divesting of certain operations and assets, which we'll talk about a bit more and we look at the remaining business, which is the Venture Life Brands business, that grew nearly 19%, 26 million. Underlying growth about 15% there, pro forma about 11%. And that's really through increased advertising promotion, increased investment in our products and our brands to grow them. Gross margin increased 4 percentage points to nearly 45.8% compared to just under 42% last year. What you're seeing in the remaining business is continuing is the higher margin [indiscernible] brands they have better pricing power, better marginality. Adjusted EBITDA for that continuing part of the business for last year was GBP 6.2 million against just under GBP 5 million last year, so good growth and an increase in that percentage margin as well. And towards the end of the period, we acquired the Health & Her brand business, giving first revenue contributions of GBP 8 million -- sorry, GBP 0.8 million in the last part of the year. We'll talk more about the Health business as we go through. Post period end, we've divested of our CDMO operations -- that transaction has exchanged on the 12th of May, and we expect that to complete between the middle and the end of July. It's just subject to some foreign direct investment regulatory filings, which are progressing at the moment. We don't expect any issues with those that's in the hands of the buyer. We're also, as you would have seen the announcement, actively marketing our brands for sale. They're noncore for us going forward, and we'll be looking for a buyer for those brands, and we'd expect to complete that by the end of this year. And so those after those headlines, I'll pass over to Danny to talk a little bit more detail about the financial results we just presented.

Good morning, everyone. So as Jerry said, we split out the presentation results this year to show the continued business, our higher-margin power brand and the discontinued operations. So on the right-hand side of the slide, I thought it useful to start the discontinued part of the business and if I just talk to the top right-hand number, GBP 24.9 million revenue, that's the discontinued operation. That comprises in big ticket items, GBP 4 million from the oral care disposal that we've just announced, includes GBP 2 million of the private label foot care products that we've had in the portfolio since 2020, around GBP 1 million of the legacy brands of Venture Life, the non-marketed products. I'm talking about [indiscernible], as an example in there [indiscernible] as well. And then the balance of around GBP 18 million is the customer brands, which is the third-party customers from our Italian business. So all in all, that business was, as you can see, just under GBP 25 million last year, down 14% year-on-year. That part of the business was contracting together with all 4 components of that part of the business. It was lower margin. It was dilutive to the portfolio of 38% gross margin. You can see on the left-hand side of the slide that gross margins on the core ongoing business were pushing 46%. EBITDA margin similarly down at 20.9% on the discontinued business relative to 23% on the core ongoing business. So we've extracted away the contracting part of the business that was dilutive to the portfolio. And we want to focus on our core ongoing business and the power brands within it. You can see if I just rle through some of the key numbers. Revenue was up 19% year-on-year to GBP 26.6 million. We'll talk about the growth drivers behind that in more detail later on in the deck. On that 19% revenue growth, we drove absolute gross profit improvement of just over 31% to GBP 12.2 million at better margins, 45.8% gross margin. Previously, when we reported the business altogether, we were at 39% gross margin business in 2023. We've shown the numbers like-for-like on this slide. So you can see that in 2023, gross margins were 41.6% on that core business. So there's a like-for-like improvement as well on the ongoing operation, and that's driven by 2 key factors. One being pricing power, as Jerry mentioned, as the Lift product has grown in particular and volumes have increased, we've been able to negotiate better supply prices from our manufacturers. And also, we internalized the production of [indiscernible] into bioposmus previous divestment, but that also gave Venture Life better supply price from what we had previously. Those are 2 key drivers. Finally, just on the left-hand side, you can see that we've called out the marketing spend as a percentage of revenue. We've highlighted this as it's an area of focus going forward for us as we want to drive for the topline growth at higher marginality. So that's 6.1% of marketing costs relative to our revenues, that's up from about 3.9% the previous year. And over the next couple of years, we see that netting out around 10% to 12% across our core brands. So [indiscernible] Health & Her products as well and health and newly launched portfolio. We see these brands have an opportunity to drive the topline but also driving gross margin increment in the business. So as we invest in that marketing spend, it also drive gross margin improvement and enable EBITDA margin to still push up towards 25% over the next 3 years. Adjusted EBITDA was GBP 6.2 million, up from GBP 4.9 million the previous year on a like-for-like basis, again, higher margins, 23%, up [indiscernible] the year before and good cash flow coming off the business, GBP 4.3 million of free cash flow on the ongoing operation, nearly 70% cash conversion. As we go forward, we would expect the free cash flow conversion to increase notably as if you look at the new business, it's capital-light in its nature. We don't have big lease costs. We don't have a big machinery in plants to maintain. So there's a high conversion of operating cash to free cash flow going forward. We will still invest in R&D, of course, but we've got a much lighter structure than we had before. Leverage, just briefly crept up to 1.83 at the end of 2024. We had just done an acquisition at the end of last year, the Health & Her acquisition in November. Post period end leverage has fallen down to about 1.6x at the end of May. And of course, when we receive the proceeds from the divestment before end of July, we'll pay down the drawn funds on the facility completely, and we'll have around GBP 36 million to GBP 40 million of cash in bank at that point. Just a few headlines now on the revenue and where that growth is coming from and where that portfolio looks like today on an ongoing basis. You can see in the left-hand side of the slide, we're showing the percentage of revenue that each therapy area comprises within the group and energy management is now the largest segment of the group at 35% of 2024 revenue. That continues to grow strongly last year, up 28% from the previous year. That's driven largely by this performance through pharmacy channels, and we'll talk more about the details around that later on. The women's intimate Health, including our balance active brand and our newly launched her Vitality brand for menopause within that range, that grew 15.5%. In the U.K., that was about 10% growth, but the international business grew strongly, particularly through some of our blue-chip partners such as Bayer, who have continued to roll out and gain increased volume in their local markets. [indiscernible], product, that was up 12% last year. [indiscernible] launched on Amazon at the end of 2023. So we've got an annualization impact coming through on there. And also we launched some new products [indiscernible] portfolio, which we'll show you later as well. Hormonal Health Next, that was acquired on the 8th of November, completed on 8th of November last year. It delivered around GBP 800,000 of revenue in the post completion period. When we acquired that business, it was generating around GBP 6 million of revenue. We expect it to do over GBP 9 million in 2025, strong growth coming through that part of the business of those brands, and that will form a bigger share -- much bigger share of the portfolio next year. Oncology support lastly, as you have heard me talk before, it's quite a lumpy in nature. It's part of the business. It's a partnered products tea. We don't sell it directly through retail. So there's some certain key customers that have fall outside of a standard 12-month order cycle. So in 2023, we had some big orders and some stocking up from 2 key partners, and that's unwound during 2024. So we expect to see those orders come through in 2025. So the adverse 14% is driven by the phasing effect of those customers. Final one on me, just to give you an operational feel of what does the business look like today post divestment. You can see we've got nearly 60 employees in the group. We've lost 120 people through the divestment of the Swedish and Italian facilities. Of those 58 people, 15 or 16 of those were acquired from Health & Her, the new acquisition at the end of last year. We brought in some exceptional talent to the team, bringing new skill sets to the business. We've got around 3,000 distribution points. That's up around 5,000 distribution points on the previous year. We've made notable inroads into retail and key retailer in Holland & Barrett during the last few months, and Jerry will talk more about that later. R&D capability remains a key focus for us in new product development. You can see on the slide we're showing we've launched 17 new products since the start of 2023. And during 2024, that generated 58 new listings into our retail trade in the U.K. We've got high retail concentration these days and that's been strengthened on the back of the Health Her acquisition. We've got a much simpler portfolio of SKUs, around 230 SKUs today. We used to have 850 because the nature of the CDMO business, producing products for third-party customers. You could have 1 or 2 products which have 7 or 8 variations those products. So much simpler portfolio today, easier to manage and easier to forecast as well, by the way. Digitalization progress is one we call out regularly. The online business has continued to grow 30% to 40% over the last couple of years, as you'll have seen us talk about. But in addition, in 2024, we've had success in growing our e-commerce website. So we've got our own [indiscernible] D2C website, but we've also got the e-commerce website and the Health & Her brand that we acquired last year. So digital progress and revenue from online has continued to grow strongly, around GBP 5 million of our GBP 26 million revenue last year came from e-commerce channels, mainly through Amazon. That represents about 18% of the business today. And lastly, revenue from new products, that bottom left-hand box that 6.1% last year. On a like-for-like basis, that's up from about 3% the previous year. And this is a key number for us going forward. We measure this revenue as based on the first 12 months of launch of a new product that we've developed. So going forward, we want to introduce a term Vitality Index, which I'm sure you'll be aware of. And that looks at 3-year rolling revenue from new product development. And over the coming years, we want to push this up towards 20% and continue investing in our R&D capability and also our marketing investment to enable that innovation to deliver commercial results.

Great. Thanks, Dan. And I noticed in the chat we've had a few questions already on the financials, and Dan will pick up on those at the end of the presentation. So commensurate with the divestment that we've done and the focus on the brands of the business, we've been working to refine our strategy and be clear what we're doing going forward. What you see on the left is our defined strategy as we. So obviously, there's a difference because all of our manufacturing and development operations are now external. I'll go through the divestment of the CDMO shortly. But what's really important to understand is those businesses we've divested of will still be making the products that we're making with them currently under a long-term manufacturing agreement that controls pricing and quality and supply. And also by joining them, joining a bigger group, we will have access to further CDMO expertise, particularly in the areas of food supplements, which will enable us to perhaps transfer more business there and improve our marginality. But what we focus on going forward? Well, acquiring and transforming core brands that have a clear runway to profitable growth. That's really important. We've done it before. We've done it recently, and that's a part of our growth strategy. But as well as investing in some new products and new assets that we want to buy, we are going to be investing in our brands that we have concurrently. And Danny has mentioned that already about the increase in the amount of marketing spend as a percentage of revenue. So that's really important. And we're going to make sure we go forward with the #1 brand mindset. That's really important because that enables you to grow the market, grow market penetration, gives you pricing power. And that's what retailers look for brands that have a real presence in their niche in the category. Having an omnichannel strategy is really important to us. What that means is that you're going to be where the shopper shops because we have 2 people who are effectively buying or using the products. We often talk about the consumer, the user, the person using the products. And that's the person that we need to influence the market to drive demand. But most importantly is where does the shopper shop -- so who buys those. And you'll see later on in the presentation that is one of the biggest buyers of the product. So it's important our products are in all of the channels so that wherever that shopper is shopping, they can buy the products. And then it might be themselves as a user, it might be a family member or someone that caring for a child that's using it. So important to be where the shopper shops. Increasing use of integrated digital capabilities. You will have seen that we're implementing the new ERP system that's ongoing at the moment. teams working very hard on that. That will be complete by the end of 2025. It's a big investment for us, but it will bring us huge improvements in reporting, processing data on the internal side of the business, but also it will enable us to aggregate and look more closely at lots of the market data, EPOS data, sales data to enable us to look for those sweet spots where our product should be where we can gain penetration and grow making use of advanced AI and we are in the process of recruiting a digital officer into the business as well as we see that's very important competency to have. And finally, all of that retaining our core entrepreneurial competencies, what's helped us to grow and adapt so far, and we want to retain and keep those. And that's about giving our team and our people the responsibility and the accountability to deliver what they're good at and give them an entrepreneurial mindset to make sure we drive value growth and margin. Looking at corporate development, we've done a few things. Some of those I mentioned already. We acquired the Health & Her business in the end of October and completed early November 2024. I'm going to talk more about that business shortly to tell you a bit more about what it is and why it's so interesting for us. We're simplifying the business structure and streamlining certain entities in the business through acquisitions in the past, we've accumulated a number of entities that we no longer use because we assets around. So that will help us reduce our reporting burden and simplify reporting. The new ERP system we've mentioned already. We divested of the CDMO business. that's exchanged in May and will complete towards the end of July. And that's that we sold some small brands as well to some of the noncore brands as mentioned. And that's allowed us to focus on growing the business as a brands business. Pure brands consumer health platform that will ultimately attract high valuations because of high margins, pricing, et cetera. So we think that's a good thing for the business and shareholders. And we are working to divest our oral care products. The noncore for us going forward. They're not within our core categories. We're in the areas of women's health, men's health, sexual wellness overlap there with type 1 diabetes [indiscernible] and oral care is a noncore area for us. We're not looking to invest further in the oral care space. So we'll be divesting those brands this year. As part of our growth going forward for M&A, we've appointed a new M&A head. They will start the middle of this month, experienced person with a lot of transactional experience of both buy side and sell side [indiscernible] looking forward to joining because, for example, acquisition that was. We didn't have a dedicated resource at that time. And we have retained our RCF, our revolving credit facility. We entered into that a year ago. When we complete on the divestment of the CDMO businesses, we will pay down all of the existing RCF debt, but the facility will still remain available to us for another, I think, 2 plus 1 year. going forward. So we'll look to use a modest amount of debt with our M&A strategy to make the money we have [indiscernible]. So I'm going to talk a little bit about the health business. So we acquired this towards the end of last year, a very exciting business that fits well into our portfolio. So we acquired the business. We pay an overall consideration of GBP 10 million, but GBP 2.5 million of that GBP 10 million is deferred and contingent upon the performance of the business at the end of October 2025. So that will be paid out in revenues for their financial year to May 2024 was GBP 6.2 million. I think as Daniel said earlier, they will do much more than that this year and probably near GBP 9 million. It's the #1 brand in [indiscernible] Holland & Barrett and it's a [indiscernible] brand that helps support the effect of hormonal change. Initially within women, now moving into men as well, and I'll explain that in a few more slides. With the deep NPD pipeline, lots of new products coming along behind that. It fits very well with our women's intimate health range, which is topical range, the [indiscernible] range, covering bacterginosis, [indiscernible], et cetera. And we've now just launched our own topical menopause range of Vitality, which again, I'll talk about later. This business is launching in the U.S., launching with CVS, one of the big 5 retailers in the U.S. with 6,000 stores, [indiscernible] products for the first half of this year and then [indiscernible] in the second half. And we're very excited about this acquisition. Simply, the mission of that business is to improve the lives of millions suffering with the impact of hormonal change. And that's where hormonal change is deplete nutrients in the body and the supplements are there to replace the nutrients that are depleted through A brief time line of the business. It was founded in 2019 by 2 entrepreneurs, [indiscernible]. They founded it with a vision to support hormonal health, spent a lot of time early [indiscernible], investing in data and research to make sure they understood the target market, and developed some products began to launch 2021, '22, moving on into the online space in the U.S. and across certain territories in Europe, also into China. And then in 2024, struck a deal to enter the retail space in the U.S. and those products are now launching out there. And they're now developing their new product development and expanding into lots retailers. One of the real attractions of this business is it has a very strong relationship with Holland & Barrett that's retailer we did not have a relationship with before this transaction. And already, the team have managed to get a number of the Venture Life products into Holland & Barrett, including [indiscernible], including Balance Active, showing the strength of that relationship and the synergistic action that we've got. Really talented and strong team of people with that business too, particular expertise in digital marketing, digital activation. And again, as we integrate the teams with Venture Life over the next rest of this year, we'll look to exploit those skills across all of our business. So just talking about the hormonal changes that women see through their life cycle, you see that here. The higher levels of [indiscernible], the lower levels of [indiscernible] and this can include [indiscernible] as well. So through all these times, women need support to help replace those nutrients depleted by those hormonal changes. And in particular, what you see here on this next slide is just an initial look at the range of the different products and how they support at different times. And you'll see in September this year that we'll be launching a maternal journey that's going to go into the key retailers and supporting a broader and broader range. So very exciting business, very well put together and in a high-growth category. As many, we don't have the same variability as women do with the levels of hormones. But over the life of the map, you see depletion in the levels of hormones. And again, there's a range of [indiscernible] to support. You see partly there in the [indiscernible] time a dip in the levels of tosterone [indiscernible]. And again, we have a specific product support. What I'd also draw your attention to on the right-hand side of the page, again, an example of the synergies from acquiring this business. There's a product called [indiscernible] that will be launching in Holland & Barrett in September of this year. That is essentially our Pomi-T product. So Pomi-T, which is for support of men with early-stage prostate cancer. We sell that through the oncology channel in a number of places, U.K. and a number of other territories. And we've imported that product, improved it with some various other ingredients, and that's now a prostate product in the Health & Him range, which is launching through the retail channels. One of the other strong attributes of the Health & Her business is the app. This is developed by the business to support women through their perimenopausal, menopausal journey, give them support ideas. It's not an app used to keep flagging up to buy the products, but it is an app that helps with all the symptoms and all the support necessary going through those phases. A really good clinical study that the business undertook. You see on the right-hand side there. And it proves through that study using the app that if you use the app to track the symptoms for 8 weeks, you actually see a reduction in those symptoms, and that's independent of taking the supplements as well. So really valuable. There's 150,000 women using this app regularly on a daily basis and many more than that we've been through the app over recent years. And again, that's an asset we can use to introduce some of our topical products into that group of people who are using the app and also to use the app technology and begin to spread it across a lot of the eventual products. So really good synergistic activity there. So where is today? You can see the retailers where they are in the U.K., in the U.S. and a little bit outside in Europe. And there's the key target. Mom is the shopper, she shops for herself, the family, parents, has the spending power. And so that's a common theme across all of our brands in terms of making sure we are where the shopper shops. A few highlights from this year -- sorry, from 2024 within the business. So you can see there the active products and customers. And you can see on the right-hand side, the new products that were launched just during that time and the customers they launched. So launches in U.S. retail as well as CVS business also sells through the [indiscernible] shop -- that's a smaller retailer. I think it's about 700 stores in the U.S., but they tend to sit in the strip mall in America as opposed to the main miles where you'll see CVS and the others. So again, good coverage there. Extending products in the U.K., launching new products, getting the products online in China and using disruptive NPD to expand the range of the distribution. More of the same in 2025, more new products being launched into more retailers. In terms of marketing, we had some great wins already. We advertised during [indiscernible] menopause documentary that's going on in the U.S. So a really good pickup in interest and sales. Lots of new products, some maternal ranges coming out this year, Vaginal probiotic as well. U.K. retail, good range extensions on the NPD, U.S. retail expansion. Again, we're talking to other retailers in the U.S. And again, as I already mentioned, the synergistic activities of starting to sell Venture Life brands across some of the portfolio and state of Health & Her and similarly the other way. So really happy with the way that's progressing. Moving on to the divestment. I'll give you a few more details. So we divested of the CDMO business. That's our Italian business based in [indiscernible] Cosmos and also the Swedish manufacturing facility [indiscernible]. We have a total enterprise value for selling of those 2 businesses of EUR 62 million -- that represents about a 10x run rate, but it represents 11x of the historic profits from that business last year. We'll be signing a long-term manufacturing agreement that will be signed on completion to continue to manufacture with those facilities that we sold, controlling pricing, both up and down, quality, regulatory and all the support we have with the normal [indiscernible]. So we'll be working with that same team and the same people in that same business, delivering the same high-quality products that they've always delivered and it will be at an arm's length situation. So we'll be sad that the team from [indiscernible] are no longer in our business, but we're really happy that they're going to be working with us in the future as we go forward to continue to deliver great quality products. And what this means is going forward, we'll have a less capital-intensive operation [indiscernible]. We won't be investing in supporting the manufacturing business, but obviously, we'll be buying products [indiscernible] from them. That means we give away a bit of profit, obviously, to CDMO. But as you've seen earlier, we're already seeing an increase in our overall profitability and margin. Just to be clear, the brands that are being disposed of that we no longer be [indiscernible] and smaller brands, they are also being sold to the same purchaser going forward partnerships relating to them.

I think just to add here, it's not on the slide, the foot care portfolio as well is the other key element of the peripheral brands. So you've got these legacy brands on the screen and also the foot care portfolio is around GBP 2 million.

So where does that leave us? So we've got a good injection of cash. And the company's focus now is really to push on more into, as we said right at the start, this area of proactive, healthy longevity or supporting people's health span. So lifespan is the length of time from when you're born to when you die. Health span is the amount of time you live an active healthy life. And in today's environment, obviously, we see a lot of chronic conditions, which impair the quality of life towards the end of people's lives. So you have this tail off of living with a chronic condition quite often for a long time. That has a high health care cost and it also impacts on the quality of life of that person. So where we focus now is in this area of preventative opportunities, and you'll see health is a very strong preventative set of products. We're looking to help people live a healthier, longer life. There are about 8 causations of over 80% of the chronic illnesses that we see today. So like chronic illnesses, obviously, things like dementia, heart disease, cancer, obesity, et cetera. And those causations are things like lack of sleep, stress, alcohol, exercise, et cetera. And by moderating and modulating those 8 key areas, you can significantly reduce your risk of these chronic illnesses. And within those areas, there's a lot of opportunity for preventative products and supportive products. So we're going to use this cash that we receive from divesting of the CDMO operations to both invest in our existing brands to increase our A&P in an unprofitable way to have good returns on A&P to acquire more interesting brands that are complementary to the portfolio and increase the good architecture of our P&L with increasing gross margins and increasing net margins and develop and become a stronger player in women's health, men's health, sexual health and some of those other areas. So it's a great opportunity for us to significantly grow and develop the business. So in summary, we want to be the partner of choice for a proactive, healthy, longevity, improving the health plan. And the simplification of our business, the divestment, the simplification we've been doing, the investment in technology will allow us to evolve into a pure brand consumer health care platform, invest in our power brands, innovate with data-driven insight and grow in key markets, which is going to be U.K., U.S. and EU. So just looking at how we're going to do that. So we're going to focus on our key targets to empower and enable self-care, to extend people's health spans and making sure in what we acquire that each of the assets and the products have a strong runway for profitable growth and have the capability to be successful. As I mentioned earlier, we've divested some certain assets. But just to be clear, these are the key brands, power brands that are going to remain within our portfolio of Venture Life. And we're going to be talking a little bit more about these brands, particularly power brands and what we've been doing with those in 2024. So at least Venture Life with a simplified business model for growth, capital-light structure. We're not investing heavily in development manufacturing facilities. Brand focused, high margins, #1 mindset, data-driven insight, omnichannel approach, integrated digital technologies, entrepreneurial, pure-play consumer health care with core geographic focus. So just to finish up, I'd like to then talk a little bit more about some of the activities that have been delivering the growth that Danny talked about earlier within our core brands, our power brands. And I'll start with Balance Activ. So there's quite a lot on this page, but essentially, what's been happening here is we've grown balance Activ by 10% in 2024. And that outpaces the overall women's health category, which is actually -- that was in decline by 1% last year. It's been driven by annualization in the grocery channel of our Balance Activ launch in 2023 and the introduction of the Thrush Cream within Tesco. So Thrush Cream is a new product we developed. It was launched at the back end of 2023, has been growing in 2024. We've had pharmacy growth driving listings through wholesalers and pharmacy and plugging the gap in our women's health range in this channel. So if you look at the U.K. market for women's [indiscernible] health, about 2/3 of it is dominated by Thrush, and that's obviously Canesten, which is a big player there. That's a drug product, but we've now launched a medical device product, which can be used for the long term. So the Thrush Cream has been launched everywhere in pharmacy, in Super Drug, in Tesco and Morrisons and it's growing very well. The percentage growth numbers are very high obviously starts from a low base and it's nearly 300% for the first 5 months of this year compared to the first 5 months of 2024. But it is the only product in growth in Thrush segment. And whilst Canesten is in decline, Canesten was down 9% first 5 months of this year compared to the first 5 months of last year, whereas the Thrush cream represents now 18% of the overall revenues from Balance Activ. And secondly we've got thin displays, our displays, formats, et cetera, creating awareness. We launched our Vitality range this year. That's a topical menopause range. So it sits very nicely alongside the Health & Her range, 5 products there. That's already been launched in a number of retailers. And we've been running the Revolution and digital marketing campaign. And we've had 1.2 million symptom checker completions through that, lots of downloads of the data and the reports that we've done. So really good progress there. And looking into 2025, as we talked about, her Vitality is now in boots, that's launched that's moving. We've got more field salespeople now out on the ground in the U.K. At the moment, Balance Activ only has 5% distribution in pharmacy. So a key target for 2025 is to drive that and make more of it as a GSL opportunity in the open sale in the pharmacies. Balance Activ has been agreed to be launched in both Boots and Holland & Barrett. Sorry, excuse me, WH Smith and Holland & Barrett this year. WH Smith when their larger stores, which give the majority of their revenues. We've also implemented price increases on Balance Activ gel and that's across most of the accounts already because we see opportunity for price increase there and marginality improvement. So really good activity on women's health and also some good international increase as well. Looking at Lift, It's been a great year for Lift, 32% growth overall year-on-year, and that includes the Glucogel brand as well, which is a more concentrated gel used for application of the gums. In 2024, we've had 23 new listings. And this primarily driven by pharmacy contributing about 61% to the overall growth in this category for us in value terms about GBP 1.4 million. It's due to CPI annualization cost price increase for customers across it. We've had a sales push, which got new listings. And all of this has been supported by strong activity with the all the forms and paperwork we've put into pharmacies. We've launched a new phase of shots and shots contribute 26% to the overall growth in this area for us. We've got NPD listings, Sainsbury's introducing products in 2024, wholesalers introducing new flavors that we have. And the overall marketing campaign has done really well with overall brand awareness of 44% and then increasing to 53% compared to last year. 2025, as I say, new pharmacy sales reps is going to be pushing that. And then we're going to increase, we hope the level of prescriptions for the product and push more into this area and informing more into the type 1 diabetes market. Finally just picking up [Aerol] grew by 10%, achieving 10 new listings last year. We have this great athlete as well. So last year, he won the most valuable products through the pharmacy magazine being nominated again this year, so a great achievement there. Retailers consistently consider [Aerol] as a top brand of choice in hair care and the product now represents 13% -- sorry, [Aerol] that we've launched represents 13% of our overall [Aerol] revenues. Some great NPD launched in '25, you'll see on the page there. We've launched the almond [Aerol] product now. For some people, olive oil isn't such a good remedy for them. It may be cause irritation and almond oil is much softer, we launched that product plus an aftercare product, which helps if you had your ears cleaned or wax removed to help you the year after. So again, really good activity in the retailers. We've got good shelf positions, as you can see on that bottom right-hand side of the slide. And we're currently working to deploy more training into pharmacies and Aerol is enjoying great expansion, as I said, going into WH Smith, going into Holland & Barrett and being shortlisted for a fantastic award. So a few highlights of our current power brands, but we're very interested for the growth and the synergistic effect of those 2 Health & Her and Balance Activ women's health brands together. So just to finish on the outlook slide, and then we'll get to the questions. And so as I said before, simplified capital-light structure, focusing on higher margin, higher multiple consumer health care landscape. I mean exit multiples in this space historically the last 4 or 5 years, averaging sort of between 13% and 15%, 14.6% we say there. So we believe that having this more pure-play branded business will deliver higher value for the business ultimately. Good net cash position after the completion of the deal to sell the CDMO. That obviously doesn't include any proceeds for selling the oral care business, but that leaves us in a strong position by the end of July. RCF still available, clear focus, investing in organic growth and selected complementary acquisitions. So that finishes our presentation. And now I'm quite happy to move over and we'll try and go through as many of the questions as we've had already. So if we start a couple I'll kick off straight away.

One of the first questions was when will the company pay dividends? Just to say, it's not our intention at this exact moment in time to pay dividends because we're obviously in a growth phase and invest in growth. But as the company becomes more and more meaningfully profitable, we would look to have a progressive dividend policy, and we'll talk more about that when we've reached that point in the not-too-distant future. Danny [indiscernible]. .

I'll take the second one. So pro forma growth of health and Her. So 2023, that business did about GBP 6 million of revenues. It's done 5.9 million in 2024 on a like-for-like basis. I think the previous owners require -- had made a lot of investments in order to establish the brand, develop the apps, build the team and really require more financing capability in order to deliver the growth opportunity in front of them. And I think I said earlier, we expect that those brands to deliver over GBP 9 million of revenue in 2025. So we feel we acquired that business at an optimal time as it turned the corner for growth again. I think important to note is that I don't think we said it earlier, these brands are significantly more accretive to the gross marginality of the group. So we're about 46% blended today. But these brands -- they generate margins of over 60%. So as we go forward and drive the growth from those Health & Her brands, we expect that to clearly push up the gross margin on the P&L. Next one for me as well, inventory. So -- so you have already seen in the results that the inventory is -- excludes the inventory associated with the CDMO business. So that's transferred to assets held for sale as part of the discontinued operations. So in 2023, inventory would have been at GBP 10.3 million on the balance sheet, it's about GBP 5.1 million at the end of 2024. But I think important to note there is that the way the noncurrent assets held for sale are accounted for, the CDMO operations, the share purchase deal, everything is moved from the balance sheet for 2024 put into the noncurrent assets held for sale line. But on the Oral Care brands, as these are an asset-based deal, still potential to be a share purchase deal subject to completion of that transaction in 2025, but it's accounted for as an asset-based deal on the balance sheet. So you'll see the inventory associated with Oral Care is actually still in our 2024 inventory line. So where we've got GBP 5.1 million of inventory, there'll be about GBP 0.75 million of inventory associated with the oral care brands in that. So really it's moving from a GBP 10.3 million last year on a combined basis to about GBP 4.5 million, GBP 4.3 million on an ongoing basis. So inventory as a percentage of revenue pro forma for 2025 would be around 12%, 13%. Previously, the group operated around 20% inventory to revenue ratio. But of course, we had all the raw materials and packaging as well on the balance sheet then as a CDMO which we no longer have.

We've got quite a long question. It's coming from somebody else -- someone on the phone. So the question is how do you ensure in pursuing noncompetitive deals, especially in accelerated time frames facilitated by new cash resources that you are conducting sufficiently robust due diligence to uncover all the material risk, financial, operational, legal and especially cultural and are not inadvertently overpaying or acquiring hidden liabilities that a competitive process might have brought to light. Yes. I think, Ben, if you followed the business since its inception, you'll see we have a reasonable track record of making acquisitions, not overpaying and delivering growth out of those. We have a very thorough due diligence process. Our preference is always not to enter a competitive process because we have very clear objectives on the price we're prepared to pay for businesses and the competitive process is done for exactly the reason of increasing the price and maximizing the price to the seller. So our preference is to look for those assets that sit complementary to what we're doing. They sit in our -- in the categories of what we want and they sit in the places that we want. So that's all about broadening out filling out spaces in our existing portfolio. And that could be filling out spaces in terms of therapy, in terms of broadening the category, in terms of distribution, in terms of geographies. So there's lots of complementarities that can be considered and adjacencies that can be considered. Second point really is how do we make sure we've done our due diligence properly well. We have a very thorough due diligence process. We do a lot of due diligence ourselves internally, but we also rely on external due diligence people, particularly for the material errors and risk. So as you said, financial and legal, we always use external providers to undertake external financial and legal due diligence. Cultural, that's important for us. We get in and understand the people, the business, the mentality and the fit. But also when you look at the market, the marketing, the distribution, the customers, what we think, we do a lot of that ourselves with our team because the important thing is when we do an acquisition is our team has to deliver the upside and the integrated business afterwards. So it's really important they're all involved in the process of undertaking the due diligence, the assessment of the business. And we have a number of stages, initial stage, early stage, helicopter view, first and second look detail. So when it comes to commercial, regulatory, manufacturing, we have a lot of that done ourselves internally or with our CDMO partners because they are the people who have to deliver that business integrated on the path. So yes, and be assured, there's never in our mind, a risk of trying to do a deal quickly and therefore, missing something. We do the diligence needed. We do it well. We do it thoroughly. And if a process wants to run ahead of that, then we're either out of the process or that has to wait because we won't undertake an acquisition at risk. Next question, which I'll pass over to Danny, if that's right.

Yes, sure. So how extensively are you using AI in the business? So we have big ambitions to drive AI in the business going forward, and we are part of our [indiscernible] new strategy that Jeremy relaid earlier, and we are working towards that and start of that is implementing the new ERP system, Microsoft Dynamics 365, which has the finance and supply chain modules within it. Key to getting our AI to be effective for us is to have our data in the business right to begin with. And to do that, we want all of our systems talking to one another. So our plan is to reinvest some of the proceeds from the divestment to grow out the number of modules we implement on the D365, so commercial modules, HR, marketing, e-commerce so that we can get insights from the data and put this all into a data lake that enables us to train the AI to give us quick insights that we can give to our field sales teams and our commercial teams to go and generate leads and execute on those and also help us identify trends in innovation and opportunities in the market. So we are on that path. It's going to take us a bit of time to get the full benefit of that, but we will go live on the ERP at the beginning of next year, end of this year and roll out those additional modules. And in tandem with that, we've been bringing in new skill sets and capability into the business in the areas of data analytics and digital capability to ensure that we've got the know-how and the expertise to drive the results and also ensure that our data has the integrity to rely upon it and deliver clear objectives to our teams.

Do you want to cover the next one? not sure what it means.

Moat, what moat does Health & Her have? I presume that means mission objectives.

Not sure about that, or it could be what moat [indiscernible] protecting [indiscernible]. It's a question which is what moat does Health & Her. So if the question is around what protection does Health & Her have around the business, it's the significant protection it has is the high level of clinical data and support it has behind its products, the clinical research that's undertaken, the studies that's undertaken, the building of the products matching them with the research, not only in our own studies, but in other studies that are available to us and making sure they properly react to the right conditions for the customer. Secondly, the app and the engagement with the app. So there's a lot of work and scientific evidence behind the products and how they're built and how they developed along with a strong marketing message and targeting the right customers in the right way. I hope that answers your question, but if that's not clear, ask another one. I'll hand over to Danny for the next question on the impact of the sale.

So the question is what impact does the sale of the manufacturing operation have on cost of goods and sold and gross margins? Just to answer the latter part of that question first, I think you can see at the start of the deck on the financial highlights that we separated out the marginality of the discontinued and continued business. The discontinued operation generated 38% gross margin. The ongoing business generates 46%, and we expect that to increment quickly over the next 3 years through growth of high-margin products. But I think what's important to note here is that the supply price in our long-term manufacturing agreement with Biodue is based on the existing prices we already had on an intercompany basis from our facilities in Sweden and Italy. That was that key part of the deal. And those prices form the basis of the EBITDA multiple that the Riverside paid for the business. So we've already got stability on that pricing, protection over the next 10 years under that long-term agreement. And the agreement allows for a mechanism on an annual basis if prices were to move up or down 3%, each party would meet in good faith to review those prices and review whether there's an opportunity to reduce them or if there's a fair justification for those prices to be increased if there were certain key input costs going up, for example, so that we would have enough time to pass through those any cost increases to our retailers as well of course pass on the pricing. But with the brands we've got left in the portfolio and the pricing power we have on those brands and the marginality improvement we've been able to generate over the last few years, we're confident in our ability to execute CPI if we need to, and we've shown that on balance of Lift over the last couple of years.

Do you want to take -- I think you covered the top. Do you want to take the next one on the corporate costs?

Yes. So the next question is, are all of the corporate costs included in the GBP 6.2 million EBITDA of the ongoing business? So the short answer is yes. As a point of clarity to that, the only corporate cost that is not in the GBP 6.2 million would be the cost of our Chief Manufacturing Officer. That sits with the divested operations. And as you will have seen us announce that [indiscernible] be standing down from Venture Life on completion of the deal. So -- but within the GBP 6.2 million, I think what is important to note is that with any divestment we do, we -- pre the divestment, we would have shared costs across our group. So we would have done recharge of management, finance, operational functions. Some of the corporate costs as well would have been recharged out. And when we account for the divested operations, because you do not lose those costs incrementally from the business, they're retained in the ongoing P&L. So the GBP 6.2 million already suffers or absorb the cost of all of that overhead in the ongoing business. So we lose temporary leverage benefit from the sharing of costs. So as we move forward, we'll expect that we'll regain that leverage benefit from those corporate costs that are in the ongoing business as we continue to grow organically and do more M&A.

Thanks. The next question is, how is Her Vitality differentiated from Health & Her? There's a very clear differentiation there. So Health & Her is a supplement only brand. It only has food supplements in it, and we will keep the brand that way. Her Vitality is a topical brand, which means it's products supplied to the skin or to the mucosal surfaces. So within that range, we have, for example, we have products that do with some of the other symptoms and effects of the menopause. For example, we have boosting face masks, collagen boosting face mask, which is to help with dry skin and the aging process that comes through menopause. We have a cooling mist to help with hot flushes. We have a vaginal dryness gel to help with -- again dryness, which is one of the symptoms and issues with menopause. And we have an anti-aging face [indiscernible] as well. So it's those sort of things that topical products supplied to the skin or the mucosal surfaces inside a vagina to help with some of those other issues of menopause as well as obviously being supported with the Health & Her products on a supplementation basis. Next question is, what is the date of the next update? And we'll put out a first half trading update towards the end of July. So we'll give you an update then on how the first half has gone. Next question is, what makes the manufacturing assets attractive to the buyer at the price paid? Well, I think you have to ask the buyer to get the answer for them. I think the reason that they bought it is because the manufacturing businesses we have are very high quality, specialized in medical devices, really good technical team, really good production setup, well-built business and the buyer is building an industrial group covering all areas of manufacturing. They have food supplements and they have, I think, 4 other facilities across Italy, covering food supplements and cosmetics, small bit of medical devices. But I think with the acquisition of our manufacturing businesses. They see a first step of a very high-quality business in the medical device area. And again, they're investing in that industrial group, and they'll look to grow it and develop it and build more revenue. So they're very keen for us to do more business with them and not just across medical devices, but across others. And obviously, as we buy products and assets, we'll look at making use of those facilities where we can. The next question is, are there any safeguards to prevent the buyer of the manufacturing assets from supplying similar products to [indiscernible]? Absolutely, It's in the agreements. How are you trading going to date in 2025? Well, as we set out already in the release, in the RNS, how we feel 2025 is going, and we'll give a trading update at the end of July. I don't know if you want to add anything to that, Daniel?

I don't think it's appropriate for us to give too much detail, but we're positive and pleased with the performance of the business, and we'll provide good detail around that later in July.

Next question is, do you foresee the founders of Health & Her staying with the business? Yes, we do. And next question is, having seen that as well as offering Health & Him products via Barrett, you offer them direct to customers via your own subscription service. I wonder whether you could comment on the retailers view of this possible conflict of interest. We don't give retailers exclusivity across our products. It's important, as we said before, shoppers, we need to be where the shopper's shop. And so no retailer expects an exclusive arrangement on our products and they might have an advanced arrangement perhaps they get to launch it first, but we always look to put all our products in all the retailers, and that includes Amazon across our own platform. So they don't consider it all as conflict of interest, they consider a natural part of the retail landscape. I think yes, someone's clarified that question earlier about the moat to barriers to entry, which I think I've answered. Final question we got is, will you multisource in the future to mitigate risk? Yes, there's a couple of things to cover there. I think what the question is aimed at is on manufacturing. And so whilst the Biokosmes facility and the [indiscernible] made a lot of our products, we have 15 other CDMOs across the business. Currently, that will go down a bit with some of the divested smaller products. But yes, we do have other CDMOs. We will look to maintain them. We have an arrangement within the agreement with the buyer of the Biokosmes next to that. They have a first right of offer on new manufacturing to see if they can give us equal terms in terms of price, quality, volume, all of the areas. So they do have a right to that. We also have the right within the agreement to have a backup manufacturer for all of the products we make with Biokosmes and [indiscernible]. So we won't look to advertly expand our CDMO portfolio because the more you have, the more risk to manage, but we will make sure it's balanced and risk is appropriately measured with CDMOs and appropriate backups.

Jerry, Daniel, thanks for answering all those questions you can from investors. And of course, the company can review all questions submitted today, we'll publish those responses on the Investor Meet Company platform. Just before redirecting investors to provide with their feedback, which is particularly important to the company, Jerry, can I please just ask you for a few closing comments.

Yes, sure. Thank you. So we've answered all the questions that are submitted. So I hope that's been to satisfaction. Thank you, everybody, for listening in. We really -- we get a lot of positive feedback from the Investor Meet platform that it gives obviously private investors an opportunity to hear directly from us as a management team. So always happy to answer questions, always happy to meet and talk about those. So I hope it's been important. It's a very exciting time in the business. As I said earlier, we're sad that a number of our colleagues who have been on the journey a long time from Biokosmes investor are moving out to be owned externally, but we think that's a great thing for them and the business and for our business. We'll be working with them going forward. So we'll continue those same discussions, relationships working together as before. But I think going forward, Venture Life, exciting time, lots of resources to deploy, great market segments that we're in, products, existing power brands growing very well. And now we've got cash to drive them, drive market share, drive NPD and to get some nice complementary assets in. So a very exciting time for the business, trading well, very happy with how the business is. And yes, we look forward to the future. So thank you for joining us, and we look forward to giving you an update on our next update.

Jerry, Daniel, thanks for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the 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 morning to you all.