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Nothing skinny about InnovaDerma's "spectacular" revenue growth driven by Superdrug push

Published: 09:28 09 Feb 2017 GMT

Body tanning
InnovaDerma said Superdrug increased shelf space for Skinny Tan on average by a factor of four since January 2016

Shares in Skinny Tan firm InnovaDerma PLC (LON:IDP) jumped higher this morning after the self-tanning and skin and hair rejuvenation group said its first-half revenues soared by over 125% and that the second-half has seen a “very strong start”.

The firm said group revenues jumped to £3.187mln in the six months to December 31, up from £1.414mln at the same stage in 2015, driven by a successful penetration of the UK market through Superdrug and direct-to-consumer sales.

WATCH: 'The growth story's just begun', says InnovaDerma's Haris Chaudhry

InnovaDerma - which moved production to the UK from Australia during the period to improve its supply chain – said gross profits increased by 131% to £1.837mn.

However, the group’s pretax loss rose to £0.154mln, up from £0.004mln, as a result of one-off exceptional listing costs and the strategic initiatives to expand the business.

Superdrug boost …

InnovaDerma said: “Superdrug has increased shelf space for Skinny Tan on average by a factor of four since January 2016, which has increased its visibility in their stores and enhanced the performance of the UK business.”

The group also said the Skinny Tan brand had been extended to 33 products, up from 25 previously, to take advantage of the brand's growing popularity.

The firm also said it had made a “very strong start to the second half of the year with January 2017 delivering the highest ever monthly sales in what is considered to be the slowest month in the self-tanning industry.”

InnovaDerma added that its US performance is in line with expectations after launching in November 2016, with the group securing opening orders for Skinny Tan from Harmon Retail Chain  - a subsidiary of Bed Bath and Beyond Inc. (NASDAQ:BBBY).

In early morning trading, InnovaDerma shares were up 16.6%, or to 21.0p to 147.5p.

Spectacular growth …

Haris Chaudhry, InnovaDerma’s executive chairman said: "I am pleased with the sound structural changes made in the first half which has contributed to a strong start to the second half.

“We are confident in our immediate and long term prospects and of emerging as a fast-growing international business with a diverse portfolio in the beauty, cosmetics and personal care space.”

Broker Hybridan said: “InnovaDerma has booked H1 numbers showing spectacular growth.”

It added: “Plenty more to look forward to in H2. Improved supply chain should boost margins. Lots to come from new product roll outs and the US has started encouragingly.”

Hybridan’s current year forecasts for InnovaDerma are for full year revenues of just under £7mln, and for pretax profit of £0.7mln.

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