OptiBiotix Health PLC (AIM:OPTI) said its sales performance improved in the second half of the year, following its investment in its senior management team, teaming up with larger partners and selling direct to consumers.
The microbiome-focused company reported results for the six months ended 30 June 2022, a period reflecting its new structure after spinning spun probiotic subsidiary ProBiotix Health PLC (AQSE:PBX) onto the AQSE Growth Market in March.
As flagged in an update last month, revenues in the period of £118,898 from continuing operations versus combined sales from both businesses of £1.1mln a year ago, were lower than expected due to delays in restocking by some large partners and in securing regulatory approval for some planned product launches.
Sales improved post period, with product launches by Apollo Pharmacies in India and restocking by some partners, but it will be insufficient to make up the first-half deficit, the company said.
The new strategy of focusing on fewer and larger business partners is resulting, as expected, in fewer but much larger orders for products than in the past, with timing differences in the placement of orders temporarily likely to affect future financial results.
But a net profit of £13.9mln was reported thanks to a substantial increase in the value of the group's holding in ProBiotix, which was partly offset by a loss on revaluation of its stake in SkinBioTherapeutics PLC (AIM:SBTX).
The balance sheet showed cash of roughly £1.5mlm, which is expected to increase to £2mln once R&D tax credits are claimed and recoverable VAT repayments are added.
Chief executive Stephen O'Hara said: “Since the beginning of 2022 we have invested in the strengthening of our senior management team and focused on expanding our portfolio of larger business partners and increasing sales of our finished products direct to consumers, so building a more robust business for the future.
“We expect to see a return on this investment in the second half and beyond.”
He pointed to the expansion of the ‘first-generation’ family of functional ingredients into new channels with the launch of LeanBiome as an entry into the sports nutrition market with The Hut Group, and WellBiome functional fibre and mineral blend to support healthy ageing.
Good progress is also being made commercialising ‘second-generation’ SweetBiotix products, where publication of a peer-reviewed scientific study confirmed its suitability as a healthy replacement for sugar.
Scientific and commercial progress was also reported for OptiBiotix’s range of second-generation prebiotic microbiome modulator products, which selectively enhance the growth rate of specific types of bacteria and create the potential for targeted treatment of a range of human diseases.
O’Hara said there was “significant progress” being made here, “which give us access to one of the most exciting areas of opportunity in the microbiome space”.
The group retains a 44% shareholding in ProBiotix Health, with a market value of circa £25m as at 30 June 2022, while OptiBiotix shareholders continuing to own approximately 44% of the ProBiotix business and the company's combined holdings in SkinBiotherapeutics and ProBiotix Health were valued at £18mln as of June 30 2022.