SECTOR: HEALTHCARE; MINING
SECTOR – HEALTHCARE
RATING – BUY*
MARKET CAP – £42.3m
CURRENT PRICE – 50.5p#
TARGET PRICE – 100p
ANALYST –BARRY GIBB
Year-end Dec
2017A
2018E
2019E
2020E
Revenue (£m)
16.1
18.4
22.0
24.4
EBITDA (£m)
1.9
2.2
3.4
4.7
Adj. pre-tax Profit (£m)
0.1
0.5
2.3
3.3
Adj. EPS (p)
(1.0)
0.4
2.1
3.3
DPS (p)
0.0
0.0
0.0
0.0
Net Cash/(Debt) (£m)
(6.3)
6.8
7.2
8.9
P/E (x)
-
126.3
24.0
15.3
Dividend yield (%)
-
-
-
-
EV/EBITDA (x)
25.6
16.1
10.3
7.1
SOURCE: Northland Capital Partners Limited estimates. #Priced at market close, *Northland Capital Partners Limited acts as Nomad and Joint Broker to Venture Life Group and therefore this information should be viewed as a Marketing Communication.
Commercial Update includes First distribution agreements for Dentyl
NORTHLAND VIEW
- Venture Life announced its first long-term international distribution agreements signed for the recently acquired Dentyl brand, together with other commercial progress. These include a 10 year distribution deal in Ireland with Eurosales International Ltd, a leading retail distribution company operating in Ireland which distributes brands such as Palmer's Cocoa Butter Formula and P20. The brand launch will take place in Q119 through new grocery and pharmacy channels both in Republic of Ireland and Northern Ireland. Currently Dentyl is only available in Ireland through Tesco stores. Elsewhere, Dentyl has also been partnered with Collis William in Malta, a long-established company that distributes its products to both pharmacies and the mass market retailers.
- The Group also announces that the first UK outdoor digital display advertising campaign for Dentyl since the acquisition will take place in November 2018 and will be shown for three weeks in five key UK cities - London, Manchester, Birmingham, Liverpool and Leeds, with an estimated reach of 1.5millon people. In addition, Amazon and Ocado will launch both Dentyl mouthwashes and BB Mints in the UK in November and December 2018, respectively. These online retailers have been important partners for UltraDEX in the UK and are expected to deliver the same for the Dentyl range moving forward.
- UltraDEX’s success also continues with international partnering deals in three new markets: China, Ireland and Malta. In the UK, Tesco has increased the distribution of UltraDEX Low-Abrasion Toothpaste from 234 to 403 stores, an increase of 72%, which has resulted in the highest level of sales of UltraDEX toothpaste in Tesco since the start of 2015.
VLG is successfully applying the strategy adopted for UltraDEX to Dentyl, capitalising on the strength of Group’s value-added/commercial platform while highlighting management’s ability to build out its portfolio. This, in turn, can be expected to improve Venture Life’s underlying quality of earnings, operational visibility and financial leverage ratios. Having achieved this at the expense of just a modestly higher post-transaction 2019E EV/EBITDA multiple underlines the opportunity the Company is now seizing.
COMPANY DESCRIPTION
The Group develops, manufactures, and commercialises self-care products which target the ageing population.
SECTOR – MINING
RATING – SPECULATIVE BUY*
MARKET CAP – £3.7m
CURRENT PRICE – 0.72p#
ANALYST – BARRY GIBB
Year-end June
2016A
2017A
2018E
2019E†
Revenue (£m)
-
-
No forecasts provided
EBITDA (£m)
(0.3)
(0.3)
Adj. pre-tax Profit (£m)
(0.3)
(0.3)
Adj. EPS (p)
(0.11)
(0.09)
DPS (p)
-
-
Net Cash/(Debt) (£m)
0.3
(0.3)
P/E (x)
-
-
Dividend yield (%)
-
-
EV/EBITDA (x)
-
-
SOURCE: Northland Capital Partners Limited estimates. #Priced at prior trading day close. *Northland Capital Partners Limited Acts as Nomad and Broker to Botswana Diamonds and therefore this information should be viewed as a Marketing Communication.
Update on Sunland Minerals JV – Potential New Partner
NORTHLAND VIEW
- Botswana Diamonds announced that it now holds 100% of the equity in Sunland Minerals, having acquired for a nominal sum the 50% previously held by Alrosa as part of the Company's joint venture with Alrosa.
- 100% ownership permits BOD management to negotiate the entrance of a new joint venture partner, for which advanced negotiations are now underway. As a result, work could begin as early as 1H19 focussing on targets identified in 2018.
- This potential new investor, itself a large diamond producer with new ideas and keen to find new kimberlites in Botswana, is close to acquiring 50% of the JV. Once finalised, the Company anticipates the party, which already has a strong exploration team, stepping into the exploration shoes of Alrosa.
- The Sunland JV was originally established in 2014 to test existing Alrosa exploration technology on Botswana Diamonds' large data base. The logic being that new technology and new approaches to exploration could identify new targets - ideally large diamond-bearing kimberlites under the Kalahari sands. Unfortunately grassroots exploration is a slow process requiring painstaking evaluation, refinement and selection of targets. This was ongoing in the joint venture, and progress has been made. The work done by Botswana Diamonds' geologists in 2018 built on pioneering work by Alrosa before the operatorship was transferred to the Company.
A positive outcome for an otherwise stalled project. Changes that took place at Alrosa in 2016 and 2017 resulted in new emphasis, whereby early stage exploration joint ventures lost priority as corporate strategy changed direction in favour of production and marketing. Today’s news highlight fresh opportunity to re-invigorate a highly prospective project to which Alrosa’s innovative technology added value over the past 4 years. Although at this stage no guarantees can be given that the new arrangements will conclude, should talks finalise some of the targets identified in 2018 could be drilled during 2019.
COMPANY DESCRIPTION
Botswana Diamonds is a diamond exploration company focused on the Kaapvaal Craton. The Company has projects in Botswana, South African and is moving into Zimbabwe.