Wellness firm with a hint of Hollywood
ONCE, youth culture ruled in the West. Now, times are changing. The over-40s are in the majority in the UK and ageing populations are becoming the norm around much of the globe. However, today’s older people are different from their counterparts in previous generations. Fitter and healthier than ever before, they are keen to preserve their looks, stretch their minds and retain as many of the advantages of youth as they can.
Venture Life Group makes products for this new wave of discerning, well-heeled older consumer, from pills designed to promote mental agility to cholesterol-lowering capsules to creams that remove age spots from the face and hands.
The shares are 58½p and should move considerably higher as the company expands both here and overseas.
Venture Life was founded in 2010 by Jerry Randall and Sharon Collins, now chief executive and commercial director respectively. A financier by background, Randall spent nine years as finance director of Sinclair Pharma (see below) before moving to his current position. Collins has spent her career in the healthcare industry, including a five-year spell at Sinclair.
The beauty and drug markets are highly competitive, dominated by huge international players with deep pockets. Venture Life is a small firm with limited resources and it has been listed on AIM for little more than three years.
However, the company is carefully targeting areas of the market and of the world where its products can stand out from the crowd. Most of its goods are in the fast-growing ‘wellness’ market – they have been medically approved, but are available over the counter to help people feel generally healthier.
Venture Life makes all its products from a factory outside Milan in Italy, so it has complete control of the manufacturing process. But most of the goods are sold via distributors, who take on the cost of selling and marketing the brands and pay a fee in return.
Over the past seven years, Venture Life has grown by creating its own products and by acquiring formulations, which it then develops so they can be sold to a wider range of consumers. It owns a luxury skincare range, Lubatti, for example, which was originally devised by Madame Lubatti, a well-known London homeopath from the late 1920s onwards, who is thought to have created bespoke face creams for film stars such as Ava Gardner and Vivien Leigh. Venture Life acquired the secret recipes, created a commercial range and launched it in China, where wealthy consumers are keen to buy skincare goods made in Europe, rather than on their home turf. It has also developed capsules and sachets containing cholesterol-lowering ingredients that are available in Benecol-branded food products such as yogurt and spreads.
With products designed to reduce cholesterol levels when they are just a little too high, Benecol has been successful in the UK and elsewhere. Venture Life has taken the active ingredients under licence and developed them for people who want their benefits in an easy-totake format. The firm has begun selling the capsules and sachets in Turkey and Eastern Europe and expect to roll out sales across the Continent over the next few years.
While some of Venture Life’s products have been developed following acquisitions of brands or licences, others have been created from scratch, such as NeuroAge, a range of memory and brain supplements that have been clinically proven to improve cognitive function. Now on sale in Canada, Germany and other parts of Europe, the product should be available in the UK in the near future. As a small business, Venture Life has adopted a practical approach to expansion. Its wares are sold primarily through pharmacies and it works with large partners, such as FTSE 100 group Hikma Pharmaceuticals and Canadian drugs giant Valeant, to distribute them abroad.
However, the group works differently in the UK because the pharmacy market here is much more concentrated. So it sells directly to Boots, Superdrug and supermarkets as they dominate sales.
Its biggest UK brand is UltraDex, a mouthwash and toothpaste range, which has undergone clinical studies to prove that it can remove bad breath for 12 hours. Unlike other products, UltraDex is medicated and designed to treat the causes of bad breath, not just the symptoms.
Despite being more costly than most mouthwashes, it is a top seller at Boots and is being rolled out on the Continent and in Asia. Bought by people of all ages, it is particularly appealing to older consumers as halitosis tends to rise with age.
Venture Life reported a 56 per cent increase in sales to £14.3million last year and, even stripping out acquisitions made during the year, revenues rose 23 per cent. The company delivered a pre-tax loss of £1.1million, as it invested in the future. This year, however, a £500,000 profit is forecast, more than tripling to £1.6 million in 2018.
Midas verdict: Venture Life had a shaky start on AIM and the shares have fallen from 109p to 58½p. At this level, they are worth a punt. The firm has amassed a portfolio of products that appeal to the youngat-heart, older consumer – a fastgrowing swathe of the population, often with money to spend. The products are being rolled out selectively, but the pace of growth should pick up as the firm expands and becomes better known. Buy now. Traded on: AIM Ticker: VLG Contact: venture-life.com or 01344 742870