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Venture Life Group
Annual Report & Accounts 2020
Delivering consumer
self-care globally
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Venture Life Group plc
Strategic Review
We explain who we are, where we operate,
our business and a summary of how we performed
against our key performance indicators.
01 Highlights 2019
02 2020: A pivotal year
04 At a Glance
06 Chair’s Statement
08 Our Business Model and Strategy
10 Our Investment Case
11 Key Performance Indicators
12 Development and Manufacturing
14 Chief Executive Officer’s Statement
19 A Responsible Business
20 Principal Risks and Uncertainties
22 Our Section 172 (1) Statement
24 Financial Review
Corporate Governance
We introduce our Board, explain our approach
to corporate governance and give details of the
Group’s remuneration principles and policies.
28 Board of Directors
30 Statement of Corporate Governance
32 Directors’ Report
36 Remuneration Report
41 Statement of Directors’ Responsibilities
Financial Statements
This section contains the Financial Statements,
the Auditor’s Report, the accounting policies and the
notes to the accounts.
42 Independent Auditor’s Report
48 Consolidated Statement
of Comprehensive Income
49 Consolidated Statement
of Financial Position
50 Consolidated Statement
of Changes in Equity
51 Consolidated Statement
of Cash Flows
52 Notes to the Consolidated Statements
86 Parent Company Balance Sheet
87 Parent Company Statement of Changes
in Equity
88 Notes to the Parent Company
Balance Sheet
IBC Shareholder Information
For more information visit
https://www.venture-life.com
Our Mission
We are committed to providing
innovative and efficacious
products for the global self-care
market, for people who want
to lead a healthier life.
Our Vision
To become a key trusted global
leader in self-care products through
our knowledge, expertise and
capability.
Through sustainable organic growth
and strategic acquisitions, we will
continue to access the significant
long-term potential of the self-care
market.
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Strategic Report
Our Highlights
A year of strong progress
Revenue (£m)
EBITDA* (£m)
Profit after tax (£m)
£30.1m
(2019: £20.2m) +49%
£6.1m
(2019: £3.0m) +105%
£2.4m
(2019: £0.9m) +162%
£30.1m
£6.1m
£2.4m
£20.2m
£18.8m
£16.1m
£14.3m
£3.0m
£2.7m
£1.8m
£0.8m
£0.9m
£0.2m
£(0.4)m
£(1.4)m
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
* Before exceptional items & share based payments
Financial
Commercial
• Revenue increased 49% to £30.1 million
(2019: £20.2 million)
• 17 new distribution agreements signed on key brands,
including four new markets for the Dentyl brand
• Gross profit increased 61% to £12.8 million
• 12 new in-market product launches
(2019: £8.0 million)
• Adjusted EBITDA* increased 105% to £6.1 million
(2019: £3.0 million)
• Profit before tax increased 141% to £3.3m (2019: £1.3 million)
• New Dentyl launches in Boots, Superdrug and Savers
• UltraDEX now market leader within UK Halitosis
mouthwash market, overtaking its nearest rival - CB12*
• Five-year agreement with UK partner for Fungal Nail
• Earnings per share increased 154% to 2.74 pence
Brush & Verruca Pen, worth €2.3m over the five-year term
(2019: 1.08 pence)
• Operating cash flow (before working capital) up 127% to
Pharmaceuticals Kelo-Cote products
£6.7 million (2019: £3.0 million)
• Appointment as second manufacturer of Alliance
• Gross margin percentage increase to 42.7% (2019: 39.6%)
• Successful Placing & Open Offer raised £34.1million
net of expenses
* Before exceptional items and share based payments
* Source: Neilsen, Retail Value Sales, 52 w/e November 2020
Venture Life Group plc Annual Report & Accounts 2020
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Strategic Report
2020: A Pivotal Year
Against a challenging backdrop
2020 was a pivotal year for Venture Life
Our response to COVID-19
Investment in Development and
Manufacturing Facility
Amidst the unprecedented global impact caused by the
pandemic, Venture Life demonstrated strong leadership,
resilience, tenacity and a robust business model.
The safety of its employees was at the forefront, as well
as continuing a first-class customer service and
delivering outstanding growth.
This is a remarkable achievement and a testament to the
huge efforts of each employee, demonstrating our ability
to quickly adapt to new working environments.
With the strong sales growth that came through in 2020,
Venture Life invested significant capital during the year
to materially increase the manufacturing capacity at
Biokosmes, our Development and Manufacturing facility.
Investment totalled £1.2 million during the year, and has
increased approximate capacity for production from
33 million to 55 million units per annum by the end of 2020.
The utilisation in 2020 still left over 40% of this capacity
available, allowing for incoming opportunities and organic
growth to be manufactured in-house.
• The Company fully implemented COVID-19 safe
• This investment included filling machinery as well
Health & Safety procedures across the Development &
Manufacturing Facility, the UK Head Office and the office
in The Netherlands
as associated infrastructure
• Filling lines increased from 10 in 2019 to 13 in 2020
• The Development and Manufacturing facility located in
• Approximate daily production capacity has risen
North Lombardy, Italy stayed operational throughout 2020
and continues to do so in 2021
from 130,000 to 250,000 units per day
• A new brand DISINPLUSTM was created in March 2020,
in response to the demand for sanitising hand-gels that
arose due to the pandemic. It was initially supplied free of
charge to local hospitals in the North Lombardy region
and then as a new revenue stream
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Acquisition and integration of
PharmaSource BV
Equity raised for future acquisitions
The acquisition of PharmaSource BV, a Netherlands-
based development and distribution business,
completed on 24 January 2020. This innovative and
profitable business sells proven medical devices in the
areas of fungal nail infections, wart removal, oral care and
women’s health. The products are sold direct through
retail and grocery chains in The Netherlands, the UK and
also through some key European distributors.
Strategically, this acquisition enables Venture Life to broaden
its product range and extend global distribution, as well as
benefit from the operational leverage Venture Life brings
with its manufacturing facility. Already, the synergies arising
from the acquisition have resulted in increased revenues and
we plan for the operations to remain in The Netherlands as
we grow the business there.
• Revenue for the full year 2020 was €3.2m (£2.80m)
representing a growth of 20% over the previous year
before the business was acquired. The acquisition of
PharmaSource BV completed on 24 January 2020,
therefore just over 11 months of trading is consolidated
into the Group results for 2020
• A five-year distribution agreement was signed with a new
partner in the UK for Fungal Nail Brush and Wart & Verruca
Pen – deal worth €2.3m over the term
• PharmaSource BV Gel launched in the Dutch retail chain,
DA, which operates approximately 200 outlets
in The Netherlands
In December, the Group undertook an institutional
placing and open offer that raised proceeds of
£36 million (£34.1 million after expenses), at a price of
90 pence per share. Participants in the placing included
both existing and new institutional shareholders.
Since Venture Life was founded in 2010, the company has
made four successful acquisitions – the Italian development
and manufacturing business in 2014, the acquisition of
Periproducts Ltd, including the UltaDEX brand in 2016,
the Dentyl brand in 2018 and PharmaSource BV in 2020.
The money raised in the placing will be used to make
selective earnings enhancing acquisitions that:
• Are in the consumer healthcare space
• Leverage the Group’s now enhanced operating capacity
• Broaden the Group’s portfolio of brands and products
• Complement the Group’s proven ability and success in
acquiring and integrating businesses into the Group and
reinvigorating brands
Venture Life Group plc Annual Report & Accounts 2020
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Strategic Report
At a Glance
Significant growth potential
in the self-care market
What we do
Venture Life brands
Where we operate
Venture Life develops, manufactures and
distributes regulated products for the
consumer self-care market. These are
non-drug products that consumers buy
without prescription, to help lead a
healthier life.
A growing global population living longer
drives the ever-increasing demand for
self-care and preventative wellness.
Combined with global healthcare
budgets being under pressure and
governments encouraging consumers
towards both self-diagnosis and
self-medication, means the self-care
market is a continually growing
market space.
Based on a vertically integrated
approach, we either acquire self-care
brands and products, or develop (in-
house) self-care brands and products.
We manufacture our own brands and
customer brands in our factory; we then
distribute these products to retail
pharmacies and grocery multiples, either
directly in the UK, The Netherlands and
Italy, or through distribution partners
elsewhere.
Venture Life has its own portfolio of
self-care brands, which are sold without
prescription through pharmacies and
other retailers in the UK and
internationally. They address a wide range
of healthcare issues, including oral care,
women’s intimate health, onychomycosis
and dermatology.
Many of our products have intellectual
property, which can include trademarks,
patents and clinical evidence proving
efficacy as well as formulation and
manufacturing expertise. Being a
non-drug company means faster
regulatory routes to market and
lower regulatory costs.
International
Our international business follows
a B2B model. We partner our own
brands around the world, focusing
on key markets. Our partners have
local market expertise and they
cover all in-market costs, so we
have no exposure to funding sales,
marketing and distribution costs in
international markets.
UK, Italy & The Netherlands
Within the UK and The Netherlands
(from January 2020), we have direct
access to both retail markets,
including key pharmacy and grocery
multiple retailers, such as Boots,
Kruidvat and Amazon. This direct
route earns us higher revenues per
unit, and in return we only invest
money in UK consumer marketing
to support the products.
UK Head and Commercial Office
Netherlands Office
Italian Development and Manufacturing Facility
Countries where products sold or partnered
Countries where no products sold or partnered
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UK Head and Commercial Office
Netherlands Office
Italian Development and Manufacturing Facility
Countries where products are sold or partnered
Countries where no products are sold or partnered
Operational locations
Number of people in Group
Partners worldwide
3
119
113
New international agreements
Key brands
Markets worldwide
17
7
44+
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Strategic Report
Chair’s Statement
2020 has been an exceptional year for the Venture
Life Group, achieving record revenues and profit,
amidst unprecedented global circumstances
manufacturing hand sanitising gel for the local
hospitals and pharmacies that were unable
to source it due to the significant increase in
demand for this type of product. Initially this
was provided by us free of charge to the health
authorities but latterly is now a new revenue
stream that contributed to revenues in 2020.
The rapid COVID-19 precautions taken by
the team in Italy, along with the production of
the hand sanitising gel meant that when Italy
reached its most stringent lockdown in the
first half of 2020, with the vast majority of
businesses being forced to close, our facility
in Northern Lombardy was classified as an
essential business and therefore remained
open. This has also been the case in the
second half of 2020, and remains the case
today. As a result, we continued to supply
our customers through this difficult time.
Our offices in the UK and The Netherlands
also had to move to COVID-safe working
and continued to be fully operational through
all of 2020.
On behalf of the whole Board, I extend our
gratitude to all of our employees for the
tremendous effort they made in 2020,
keeping our business fully open, our people
safe and our customers supplied. It was
an incredible achievement.
For a fifth consecutive year, we were included
as one of the companies listed in the London
Stock Exchange’s publication 1000
Companies to Inspire Britain – a publication
that recognises businesses across the UK
that outperform their peers. This is strong
testament to the dynamic team we have at
Venture Life.
Dr Lynn Drummond Non-Executive Chair
Highlights
• Record revenues of £30.1 million, +49%
• Record adjusted EBITDA* £6.1 million, +105%
• Gross cash £42.1 million at 31 December 2020
* Before exceptional items and share based payments
2020 has been an exceptional year for the
Venture Life Group, achieving 49% growth
in revenues and 105% growth on adjusted
EBITDA, amidst unprecedented global
circumstances. It became a year that
tested businesses and people.
The Group began 2020 with good momentum
from 2019, a strong order book and demand
across its business. As the COVID-19 virus
spread to Europe, it put substantial strain on
each of the operations of our business, as
lockdowns began and governments started
closing down sectors of their economies.
Biokosmes S.r.l, our development and
manufacturing facility, is based in Northern
Lombardy and bore the initial impact from the
virus as it reached Europe, in the first quarter.
However, our fantastic team in Italy quickly
adapted to the situation, immediately
instigating COVID-safe working procedures
to protect employees and the business. At the
request of the local government in Northern
Lombardy, we very quickly began
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The pandemic brought many challenges
alongside that of remaining operational,
such as supply chains becoming stretched as
cash dried up. There is no doubt that having a
strong balance sheet helped us to overcome
this. Many suppliers were restricting the supply
of raw materials to those customers who
could pay up front, and our strong cash
position enabled us to ensure the continued
sourcing of raw materials to meet customer
orders. This has resulted in an increased
inventory position for us during the year and
at the year-end, but this inventory readily
converts into revenues and subsequently
cash as we manufacture the finished goods.
This increased inventory allows us to ensure
customer supply continues uninterrupted.
As we previously did twice in 2019, we built
UK inventory levels at the back end of 2020
to ensure that we covered the risk of border
disruption through the Brexit process at the
end of 2020. As it has transpired, a Brexit deal
was achieved and congestion at the UK
border has been limited, and increases in
border administration being comfortably
managed by our team, so in 2021, we will be
able to return our UK stock levels to normal.
In 2020, UK revenues only represented 16%
of our overall Group revenues, and so for the
rest of our business, Brexit has not caused
any issues with our products being delivered
to customers around the globe from Italy.
The PharmaSource BV business we acquired
in January 2020 has been well integrated into
the Group, and we expect to begin
manufacturing the products at Biokosmes
during the first half of 2021. This will mark the
complete integration of PharmaSource into
the Group. This business performed very well
in 2020 and we have started to achieve
synergies in line with our expectations.
During 2020, we increased our investment
in our manufacturing capability to ensure
we keep a deep bow-wave of capacity ahead
of the business as revenues continue to grow.
With the exceptional growth seen at the start
of the year, and mindful of our ambition
to continue to acquire interesting products,
we invested £1.2 million (2019: £0.4 million),
significantly increasing our production
capacity. This included investment directly
in filling machinery as well as the
associated infrastructure.
Acquisitions will continue to feature in the
growth of the Group and at the end of 2020
we achieved a significant step towards our
future growth by raising £34.1 million (net of
expenses) to acquire further products for the
Group. This significant placing and open offer
meant we finished the year with £42.1 million
of gross cash in the balance sheet, £35.5
million net cash excluding Finance Leases.
This cash, in conjunction with additional
modest debt facilities, gives us significant
strength to continue to acquire interesting
assets that we can leverage through our
operating capabilities. We are continually
reviewing opportunities in the market place
and we expect to complete on some of these
during 2021. The deployment of this cash in
profitable product assets is expected to
significantly increase the profitability of
the Group in the future.
The placing in December 2020 was supported
by our existing institutional shareholders, but
also saw a number of notable new institutional
shareholders, and on behalf of the Board, I
thank both new and existing shareholders for
their support in this capital raise. Also, I would
like to thank our fantastic employees across
the Group for their incredible hard work,
commitment and tenacity this year, dealing
with incredibly difficult circumstances. I am
sure we have an exciting year ahead.
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Dr Lynn Drummond
Non-Executive Chair
24 March 2021
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Strategic Report
Our Business Model and Strategy
We have multiple revenue growth
opportunities, both organically and
through our acquisition strategy
Our key activities
Our resources
Our people
Our dedicated and talented team
have a “can-do” attitude, combined
with the ability to adapt to fast-
changing environments. They work
with a strong collaborative spirit as
demonstrated in the COVID-19
pandemic.
Knowledge & expertise
Combined with an experienced
management team, our R&D team
has been developing healthcare
products for over 35 years, registered
as Medical Devices and Cosmetics.
Our brands
We have a concise range of self-
care brands in areas including oral
health, women’s intimate health and
dermatology. Many of these brands
have intellectual property and
clinical supporting efficacy.
R&D and manufacturing
Our 5,500m2 manufacturing facility
differentiates us from our peers. With
a strong technical team in place with
regulatory experience, we are agile in
responding to market demand.
Acquisition success
We have a proven track record of
quickly and effectively integrating
acquired products and/or
companies, by utilising our
manufacturing resources and
invigorating acquired brands
through dynamic marketing and
selling strategies.
Partnerships
Key to our growth is our continued
drive to be the “partner of choice”
for self-care products by fostering
and nurturing strong partnerships all
over the world.
Based on a vertically integrated approach, we either acquire
or develop self-care products and brands. These products are then
manufactured in-house and sold to a network of international partners
and to key retailers in the UK, The Netherlands and Italian markets.
Research &
development
Acquisitions
Manufacturing
Consumer
self-care
products
Distribution
Creating,
fostering &
nurturing
partnerships
Our company
We are committed to providing innovative and efficacious products
for the consumer self-care market. Key to our growth is our continued drive
to be the “partner of choice” for self-care products. We also have the agility
to move fast and capitalise on growing consumer trends. Our model is
supported by the following key components:
• Experienced management team
• Committed and dynamic team
• 5,500m2 in-house manufacturing
and development facility in Italy
of 119 people
• Expertise in product
• Vertically integrated business
model
development, manufacturing and
distribution
• Head office in the UK
• Commercial operations in the UK,
• Experience in acquiring products
/brands and reinvigorating them
Italy and The Netherlands
• Fostering and nurturing
partnerships – strong
relationships with 113 partners
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Fully integrated for growth
2020 has seen our strategy deliver another year of both organic growth and growth
from acquisition, with the Group increasing both revenues and profit.
Investments
Acquisition
We invested significant capital in
2020 to materially increase the
manufacturing capacity of our
Development and Manufacturing
facility and have increased
operational leverage to exploit
revenue growth.
•
Investment totalled £1.2m
during the year
• Approximate capacity for
production increased from
33 million to 55 million units
per annum by the end of 2020
• Filling lines increased from 10
in 2019 to 13 in 2020
• Daily production capacity
increased from 130,000 to
250,000 units per day
Our acquisitions illustrate how we can
use our manufacturing capabilities to
manufacture in-house to improve
service, working capital and margins,
develop new line-extensions, increase
local distribution, improve marketing
and internationalise the brand in a
short space of time.
• M&A transactions have built up
a portfolio of leading brands and
products, including UltraDEX
in 2016, Dentyl in 2018 and
PharmaSource BV in 2020
• The recent equity raise
will help support the company’s
ambitious growth plans in
2021 and beyond
• Proven track record in acquiring
and integrating businesses
and reinvigorating brands
Sustainably profitable
Since entering the public market
in 2014, the Group has achieved
compound annual revenue growth
of 27% (up to and including 2020),
which comes from a combination
of organic and acquired growth.
We continue to be sustainably
profitable through:
• Investment in the
manufacturing facility to
support the Group’s overall
revenue growth and increase
manufacturing capabilities
• Focusing on our own brands,
which provide opportunity
for margin expansion and
shareholder return
• Growing in-market revenues
through existing and new
partners
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Key achievements
With growth through our organic and acquisitive strategy,
Venture Life Brands now represent 50% of the Group’s
revenues (2019: 33%). The synergies from the
PharmaSource BV acquisition are coming to fruition,
and the equity raise of £34.1 million (after expenses) will
facilitate further selective earnings enhancing acquisitions.
• 17 new distribution agreements signed, including four new
markets for Dentyl Brand
• Boots launched Dentyl in 800 stores, including flagship
stores and Boots.com
• UltraDEX is now market leader within the UK Halitosis
mouthwash market, overtaking its nearest rival - CB12*
• Units produced at our factory in 2020 were up 8% over 2019
* Source: Neilsen, Retail Value Sales, 52 w/e November 2020
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Strategic Report
Our Investment Case
We create value for shareholders by acquiring or
developing, manufacturing and commercialising
products/brands for the self-care market
Recognised expertise
Clear strategy and proven
business model
Geared for growth
• Experienced leadership team
• Expertise in product development,
manufacturing and distribution
• Over 35 years in developing and
• Strategy of building a strong
portfolio of market-leading brands
through market penetration and
international expansion
manufacturing healthcare products
• Establishing itself as a key partner
• Strong in-house technical team
with regulatory expertise
• Experienced commercial team in
home and international markets
in the development and
manufacturing of consumer self-
care products
• Supported by a vertically integrated
model – Venture Life innovates,
develops, manufactures, and
markets self-care products globally
• Organic growth from existing and
new distribution partners globally
• Growth from developing innovative
products and line extensions
• Additional growth from further
acquisitions
• Revenue and profit growth through
increased manufacturing
throughput
Read more on pages 8 and 9
Read more on pages 8 and 9
Read more on pages 8 and 9
Profitable and cash generative
Operational leverage
Proven track record in
successful acquisitions
• Record adjusted EBITDA* of
£6.1 million, +105% over 2019
• Operating cash generative
• Gross cash £42.1 million at
31 December 2020
* Before exceptional items and share based payments
• £1.2 million invested in the
• M&A transactions to build a
Development & Manufacturing
facility in 2020
• Increased capacity from 33 million
units to 55 units per annum,
an increase of 67%
• Significant capacity for growth and
the ability to accommodate both
organic and acquired growth
• Gross margin improvement with
growing revenues
portfolio of leading
brands/products, including
UltraDEX in 2016, Dentyl in 2018
and PharmaSource BV in 2020
• Experience in reinvigorating
acquired brands and turning them
to growth
• Experience in internationalising
brands to help drive growth
Read more on pages 24 and 25
Read more on pages 12 and 13
Read more on page 15
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Key Performance Indicators
How we measure our progress
Our KPIs align with our strategic framework and our road map for developing
our business in the coming years
Revenue (£m)
EBITDA* (£m)
£30.1m
(2019: £20.2m) +49%
£6.1m
(2019: £3.0m) +105%
£30.1m
£6.1m
£20.2m
£18.8m
£16.1m
£14.3m
£3.0m
£2.7m
£1.8m
£0.8m
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
* Before exceptional items & share based payments
Profit after tax (£m)
EPS (p)
£2.4m
(2019: £0.9m) +162%
£2.4m
2.74p
(2019: 1.08p) +154%
£0.9m
£0.2m
2.74p
1.08p
0.42p
£(0.4)m
£(1.4)m
(1.00)p
(3.76)p
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
Venture Life Group plc Annual Report & Accounts 2020
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Strategic Report
Development and Manufacturing
Our 5,500m2 manufacturing facility
is a key differentiating factor from our peers
Investment for growth
Increased factory space to increase production
Our 5,500m2 facility is located in northern Italy,
near Milan. This facility manufactures both our wholly
owned Venture Life Brands and Customer Brands,
which are sold under the customers’ brand names.
We have over 35 years of experience in developing
consumer healthcare products (registered as Medical
Devices or Cosmetics), and a strong technical team in place
with regulatory expertise. This in-house ability to develop
and manufacture allows us to be agile in responding to
market demand.
Our development and manufacturing capability is a key
revenue driver for the Group. With our strong growth to
date and strategic ambition, we invested significantly in
2020 to increase the manufacturing capacity.
• Investment totalled £1.2 million during the year
• Filling lines increased from 10 in 2019 to 13 in 2020
• Units produced per day increased from 130,000 to
250,000 per day
With the installation of three new filling lines, we made
infrastructure improvements within our manufacturing
facility. This included the reorganisation of the
warehousing and storage facilities to allow more space
for the new filling lines.
We relocated office space and externalised packaging
storage to increase the production area, as well as invest
in additional fire safety protection for the facility.
The Group now has significant capacity for growth, which will
accommodate both organic and acquired growth. There is
also the opportunity to expand the current factory footprint
still further, in addition to being able to lease nearby buildings
to continue current expansion should it be required.
Investment
£1.2m
Filling lines increased to
13
Development and Manufacturing Facility
(2019: 10 filling lines)
Production capacity increased
Daily unit capacity increased
+67%
55 million units in 2020
(2019: 33 million units)
+92%
from 130,000 to 250,000 units
per day
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Operational leverage
Our manufacturing scalability
The manufacturing and development facility has plenty
of scope for additional revenue generation with an
estimated spare capacity of 49% at the end of 2020.
Our development and manufacturing facility services both
VLG and Customer Brands.
The Group has significant capacity for growth,
which will accommodate both organic and acquired
growth. There is also the opportunity to expand the
current factory footprint further, in addition to being able
to lease nearby buildings to continue current expansion
should it be required.
Biokosmes, Italy
Estimated spare capacity at
the end of 2020 is 49%
Primary production facility for
all Group revenues*
* Excludes NeuroAge and Dentyl Fresh
Breath Beads
120
100
)
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60
40
20
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VLG Brands
Customer Brands
Customers
Capacity including
new leased building
plus extending
current building
100
Capacity including
new leased building
Capacity at end
of 2020
75
28
55
.
5
2
1
Units produced
in 2020
£1.2m
£3.0m
£7.0m
Additional capex (£million)
Venture Life Group plc Annual Report & Accounts 2020
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Strategic Report
Chief Executive Officer’s Statement
Continuing to deliver exceptional results in a
challenging environment, with growth through
our organic and acquisitive strategy
and improve margins, alongside organic
growth from our consolidated business.
The funds raised in December 2020,
complemented by a sensible amount of debt,
will be deployed to acquire carefully selected
earnings enhancing product assets which
we expect will allow the Group to significantly
increase its revenues and profitability in future
years, as it becomes a recognised player in the
consumer healthcare space.
The results for this year would have been
noteworthy in any event, but given they have
been delivered during the COVID-19
pandemic of 2020, they are even more
remarkable. The team across the whole
business has been outstanding in their
response and perseverance through these
incredibly difficult times, particularly in
Biokosmes where the plant was kept fully
operational at all times, even at the height
of the severest lockdown measures in early
March. I must give my heartfelt thanks and
appreciation to every single member of our
dedicated, knowledgeable and hard-working
team, who kept our business operating
through this storm, and continues to do so.
It is in times like these that the robustness of
a business is tested, to see if it can cope with
and react to adverse changes in its operating
environment, and the Group demonstrated
this in abundance during 2020. The simple
requirement to do our day-to-day job became
difficult in an environment where our priority
is to keep employees safe and protect them
from the virus. We came into 2020 with
significant new business that had been put
in place in the previous year, and this was
already driving activity in Q1 2020 before the
pandemic struck. New initiatives in the UK with
our key brands, Dentyl and UltraDEX, were
beginning, as well as orders from our Chinese
oral care partner, as they saw strong interest
and sell out in our oral care product Dentyl
before the pandemic hit. The addition of
PharmaSource brought exciting new products
and customers, along with a strongly
performing Dutch business. The Customer
Brands business based out of Biokosmes
in Italy also had a record order book coming
into the year and has generated good new
business for 2020 from new and existing
customers.
Jerry Randall Chief Executive Officer
Highlights
• Business remained fully operational as a Going Concern
despite the COVID-19 context
• 49% year-on-year revenue increase, mostly organic
• Integration of the PharmaSource BV business,
acquired on 24th January 2020
• Improved gross margin of 42.7% (2019: 39.6%)
• Positive operating cash flow
• Placing and Open offer raised £34.1 million net of
expenses during Q4 2020
• Additional €3.5m debt raised on attractive terms
Operating review
The Group delivered exceptional results
for 2020 with all measures of financial
performance significantly ahead of 2019 and
ahead of expectations at the start of 2020.
These excellent results were achieved against
the backdrop of the COVID-19 pandemic and
the limitations and restrictions that it brought
with it. The Group has spent recent years
building a vertically integrated operating base
that is highly leverageable, upon which it is
capable of significantly increasing revenues
and profitability in the future. Since entering
the public markets in 2014, the Group has
achieved a compound annual revenue growth
rate of 27% (up to and including 2020), which
has come from a combination of organic and
acquired growth. In 2016, 2018 and 2020, the
Group acquired interesting assets that it could
leverage with its operational base, and each of
these assets has shown meaningful growth in
revenues and profitability since acquisition.
This strategy will continue to form the basis
of future growth, making selective earnings
enhancing acquisitions to utilise capacity
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This activity was then supplemented even
further by the launch of the new DISINPLUSTM
brand in March 2020, a newly developed hand
sanitising gel, launched in response to COVID-
19. The team at Biokosmes was able to react
incredibly quickly and within 11 days from the
request for help from the local government in
Italy, was producing the hand gel to supply
local hospitals and pharmacies, to enable
them to continue to treat COVID-19 patients.
This speed and flexibility is a fundamental
quality of both our team and our business.
Revenues for the year of £30.1 million were
split 50% for the Venture Life Brands
(2019:33%) and 50% for Customer Brands
(2019: 67%), although both parts of the
business grew during the year. The Venture
Life Brands generated revenues of £14.9
million (2019: £6.7 million), and were driven by
growth, both in UK and China, of our Dentyl
and UltraDEX brands, up 33% to £7.3 million
combined (2019: £5.5 million); the addition of
the DISINPLUS range of £3.6 million (2019:
£nil), and finally the addition of PharmaSource
BV acquired in January 2020, which brought
revenues of £2.8 million (2019: £nil). The
Customer Brands business also grew well,
delivering revenues of £15.2 million (2019:
£13.5 million), driven by new business from
some key existing customers as well as from
new customers.
Despite this overall growth in revenues and
profitability, the Group was impacted
negatively by COVID-19 in terms of:
• Delays in orders and launches of products
•
by international partners;
Impact on UK retail sell-out due to the High
Street being impacted during lockdown;
• Additional costs incurred operating in a
COVID-safe way.
Whilst there was a significant switch during the
lockdown periods from customers buying in
store to online, this did not mitigate the lower
shop footfall. Despite this, our Dentyl brand in
the UK delivered strong growth, where as
UltraDEX suffered more from the slowdown
seen in Boots, as it is weighted heavily with
this retailer.
The operational leverage that we have built is
evident in the results, with the material growth
in gross margin, adjusted EBITDA (before
exceptional items and share based payments)
and earnings. By the end of the year we had
invested significantly in the plant and
generated significant free capacity, estimated
at 49% in unit terms, for future growth to be
Case study:
Success in acquisitions
2020 saw a number of early synergies from
the acquisition come to fruition, with
highlights including:
• Revenue for the full year 2020 was €3.2m
(£2.80m) representing a growth of 20%
over the previous year before the
business was acquired. The acquisition
of PharmaSource BV completed on
24 January 2020, therefore just over
11 months of trading is consolidated into
the Group results for 2020
• A five-year distribution agreement was
signed in the UK for Fungal Nail Brush
and Wart & Verruca Pen – a deal worth
€2.3m over the term
• PharmaSource BV Gel launched in the
Dutch retail chain, DA, which operates
approximately 200 outlets in The
Netherlands
• Six further international agreements
completed on PharmaSource BV products
• Successful completion of technical audits
for the nail fungal pen, wart pen, wart
plasters and BV gel
M&A is one of the key drivers for the growth
of the business. The acquisition of of the
UltraDEX brand in 2016, followed by Dentyl
in 2018, illustrates how we can use our
manufacturing capabilities to manufacture
in-house, develop new products for the
brands, improve margins, increase
distribution, and improve marketing through
our commercial team and internationalise
the brand within a short space of time.
PharmaSource BV, acquired in January
2020, became the latest company to join
the portfolio. The team of six, based in
The Netherlands, has integrated well and
we expect to begin manufacturing
PharmaSource BV product at our
manufacturing and development facility
during the first half of 2021.
PharmaSource BV revenue
£2.8m
New distribution agreements
7
signed since acquisition
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Strategic Report
Chief Executive Officer’s Statement
continued
Case study:
A spotlight on the Dentyl Brand
Acquired in 2018, the brand performed
exceptionally well in 2020 with revenues
increasing 80% to £4.3 million (2019: £2.4
million). There were several contributing factors
resulting in this substantial growth.
2020 brand highlights include:
• Boots launched Dentyl into 800 of its largest
stores and on Boots.com in Q4 2020
• Launch of the new Dentyl Unicorn and
Mermaid Editions, developed in-house in our
development and manufacturing facility
• Dentyl Unicorn Edition launched in all UK
Superdrug stores and Dentyl Mermaid
launched in all Savers stores, with Amazon
and Ocado launching both Unicorn and
Mermaid Editions in Q1 2021
• Developed, tested and launched in
Sainbury’s a new Dentyl sub-brand – Dentyl
Fresh Protect
• Achieved rapid online growth, with sales of
Dentyl on Amazon increasing by 648%
compared to 2019
Internationally, revenues increased 308% to
£1.6 million (2019: £0.4 milion)
•
We announced the inclusion of Dentyl
mouthwash in Cardiff University’s independent
in-vitro study that was published independently
in November 2020. Results showed that CPC
technology (Dentyl’s key ingredient) inactivated
SARS-CoV-2 completely within a 30 second
exposure in a lab setting.
Further to this, the multi-centre in-vivo clinical
study being conducted by Cardiff University
involving both Dentyl and a newly developed
UltraDEX CPC-MAX mouthwash is now
nearing completion of patient recruitment. The
data is being analysed and will be submitted for
publication and independently peer-reviewed.
We will update the market with the findings in
due course, once the study has been
published.
2020 Dentyl revenue increased
+80%
Boots launches Dentyl
800
stores and online
16
Venture Life Group plc Annual Report & Accounts 2020
Operating review continued
accommodated, plus options for further
expansion. Increasing revenues through the
plant brings gross margin enhancement as
fixed costs are spread over more production,
meaning we expect a long-term improvement
in gross and net margin as we grow revenues.
Despite the significant growth in revenues, we
continue to keep tight control of costs, and
aside from the one off costs associated with
COVID-19 and with the PharmaSource
acquisition as well as the additional
PharmaSource cost base, our overheads only
increased £0.4 million in the year compared to
2019. This has resulted in earnings per share of
2.74p, a significant increase of 154% over 2019.
Venture Life Brands
UltraDEX
Revenues for UltraDEX fell 4% to £3.0 million
(2019: £3.2 million) throughout 2020. A fall in
the UK revenues £0.4 million to £2.2 million
was offset by a rise of £0.2 million in the rest of
the world. UK sales were adversely affected as
COVID-19 impacted the High Street in
particular (Health and Beauty Channel - Boots
and Superdrug) – this impact was especially
felt in H1 during the first lockdown, as UK sales
fell by 20% in H1 2020 compared to H1 2019.
However, sales in the UK have recovered
somewhat in the second half and whilst they
are not yet back to the levels pre-COVID, the
decline eased to 6% in H2, hence a decline
across the full year of 14%.
We did however see rapid growth through the
Online Channel, which was to be expected:
sales of UltraDEX on Amazon increased by
+98% year-on-year.
Despite the impact of COVID-19 in the UK,
UltraDEX overtook CB12 (Mylan brand) to
become the UK’s biggest mouthwash brand
for Halitosis based on Value Share for the first
time in 8 years (source: Nielsen, Retail Value
Sales, 52 w/e Nov-20). Furthermore, UltraDEX
successfully retained all of its distribution
throughout 2020 despite the challenges it
faced, and this is important as we move
into 2021.
In the UK, social media following increased on
both Facebook and Instagram by c. 273% and
our media campaign impressions increased by
114% throughout 2020.
Internationally, UltraDEX is now partnered in
15 markets.
VLG_2020 AR_REV_AW.qxp_VLG_2020 AR_V.1 01/04/2021 09:36 Page 17
Dentyl
Revenues for Dentyl rose 80% to £4.3 million
(2019: £2.4 million). In the UK, Dentyl
performed exceptionally well through the
pandemic with revenues up 33% to
£2.6 million (2019: £2.0 million) – the brand
saw modest growth in H1 2020 of +10%
compared to the same period the prior year,
but that growth significantly increased to
+60% in H2 2020 compared the same period
the prior year, due to a number of reasons.
Throughout 2020, Dentyl over indexed in
supermarkets, meaning a greater percentage
of Dentyl was sold in supermarkets compared
to the Health and Beauty Channel on the UK
High Street, and thus fared much better
throughout the pandemic, as supermarkets
were less affected versus the UK High Street.
At the same time, a number of new initiatives
also came to fruition, helping to fuel growth.
In H2 2020, Boots launched Dentyl into 800 of
its largest stores and on Boots.com; although
this distribution represents approximately a
third of their stores, the weighted distribution is
78%. Alliance Healthcare (the wholesale arm of
Boots UK) also launched Dentyl, which will
ensure greater access to independent
pharmacies across the UK moving forward
(approximately 35% of pharmacies order
exclusively through Alliance Healthcare).
Dentyl expanded its UK distribution by
launching in some key Value Retailers – B&M
stores (one of the fastest growing retailers in
the UK) and Bodycare.
We also saw new products developed
in-house at our manufacturing facility come
to market. In October, we launched the new
Dentyl Editions (namely, Dentyl Unicorn and
Dentyl Mermaid) into AS Watsons stores.
During Q4, Dentyl Unicorn launched in all
Superdrug stores (c.800 stores) and quickly
became the bestselling Dentyl variant. In
Savers, Dentyl Mermaid launched with full
distribution (c. 500 stores). In November, we
developed, tested and launched a new Dentyl
sub-brand called Dentyl Fresh Protect in
Sainsbury’s; priced competitively, our intention
is to target and attract consumers to the brand
from the lower end, private label segment of
the market.
Throughout 2020, we saw rapid growth
through the Online Channel. Sales of Dentyl on
Amazon increased by 648% year-on-year and
Amazon has also confirmed the launch of the
new Dentyl Editions in Q1 2021.
Finally, we announced the inclusion of Dentyl
mouthwash in Cardiff University’s independent
in-vitro study that was published
independently in November 2020. Results
showed that CPC technology (Dentyl’s key
ingredient) inactivated SARS-CoV-2
completely within a 30 second exposure in a
lab setting.
Further to this, the multi-centre in-vivo clinical
study being conducted by Cardiff University
involving both Dentyl and a newly developed
UltraDEX CPC-MAX mouthwash is now
nearing completion of patient recruitment.
The data is being analysed and will be
submitted for publication and independently
peer-reviewed. We will update the market with
the findings in due course, once the study has
been published.
Internationally, we also saw the brand perform
well, with revenues increasing 308% to
£1.6 million (2019: £0.4 million) primarily down
to sales to our Chinese partner. Our partner in
China suffered like so many businesses having
to shut down during the pandemic, then restart
its business in the autumn after the lockdown
ended. The stock we shipped to them towards
the end of the first half of the year only arrived
in China in late September, again due to COVID
related delays in shipping, and so that stock
started to sell in Q4 only. We did not ship any
product to China in H2, but we have begun
shipping product to China in Q1 2021.
We saw 4 new launches for Dentyl
internationally, including Portugal, UAE,
Singapore and Dentyl Fresh Breath Beads
in Jordan.
Other Brands
Excluding UltraDEX and Dentyl, the other
Venture Life Brands within the international
division grew by +11%, due to continued
steady growth on Procto-eze and Myco Clear
in particular. Overall, we saw 17 long-term
distribution agreements completed
throughout 2020, as interest remains high on
both the Venture Life Brands and the newly
acquired PharmaSource products.
Agreements were reached on Myco Clear (nail
fungus), Procto-eze (Haemorrhoids),
DISINPLUS (hand sanitising gel) and also wart
products. We continue to identify key target
companies for all our products, including these
smaller brands throughout 2021.
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DISINPLUSTM
This brand was newly created in 2020 in
response to the demand for hand sanitising
gel that arose due to the pandemic. Sales for
the whole year were £3.6 million, of which
£1.5 million was in the UK. There were no
sales of this product in 2019.
The product itself was originally made by
Biokosmes in 2004 at the time of the SARS
Bird Flu outbreak. In the spring of 2020 when
the virus gripped Northern Lombardy, the local
government approached Biokosmes to ask if
they could make such a hand gel – local
hospitals could not find any supplies and
without it they could not admit any more
patients, similarly for local pharmacies.
Within 11 days of this request being received,
Biokosmes was making its first batch – initially
this was supplied free of charge, and
subsequently this supply continues and is paid
for by the Italian Government. Biokosmes was
highlighted and praised throughout the Italian
media and this generated a significant level of
enquiries for the hand gel from commercial
sources (for example, grocery chains,
pharmacies and distributors to retail). As a
result, the brand name DISINPLUS was
created and a suite of 8 products were
developed and are now marketed. Sales in the
first half were very significant, at £3.2 million, as
there was significant demand due to hand gel
shortages. This included £1.5 million of sales
to ASDA in the UK. In the second half of the
year, the significant stocking into the channel
in many countries caused a hiatus in sales of
the gel for the Group, but later in H2 they
returned, albeit, at much lower levels.
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Strategic Report
Chief Executive Officer’s Statement
continued
Operating Leverage and Capacity
A key part of revenues delivered by the Group
is from the development and manufacturing
capability that we have at Biokosmes. This
facility manufactures the vast majority of the
products that the Group sells, exceptions
being NeuroAge, Dentyl Fresh Breath Beads
and currently the products from PharmaSource,
although we expect PharmaSource products
will come into the factory in 2021. With the
strong growth experienced and our further
ambition, we invested significantly during
2020 to materially increase the manufacturing
capacity at Biokosmes. This investment
totalled £1.2 million during the year, and has
increased our approximate capacity for
production from 33 million units per annum to
55 million units per annum by the end of 2020.
The investment went towards three new filling
lines, infrastructure modifications and fire
safety protection for increased throughput.
This also included a reorganisation of the
warehousing facilities and the storage of
packaging materials.
The Group now has significant capacity for
growth, which will accommodate both organic
and acquired growth. Beyond this, the Group
has the opportunity to expand production
further through increasing the footprint of the
current factory and leasing further nearby
buildings to continue capacity expansion if
required, beyond the current 55 million pieces.
Capital Raise
In December, the Group undertook an
institutional placing and open offer, raising
gross proceeds of £36.0 million (£34.1 million
after expenses), at a price of 90 pence per
share. This money will be supplemented by
sensible levels of debt and will be used to
make selective earnings enhancing
acquisitions that meet the Group’s strict
criteria, in order to grow the revenues and the
profitability of the group. Participants in the
placing included both existing and new
institutional shareholders. Of the total gross
proceeds, £34.0 million was raised via the
placing and £2.0 million via an open offer to
existing shareholders.
Other Brands continued
PharmaSource
Revenue for the full year 2020 was €3.2m
(£2.80m) representing a growth of 20% over
the previous year before the business was
acquired (unaudited revenues for the 12
months to 31 December 2019 were €2.6m
(£2.3m at an exchange rate of €1.124/£1.0).
The acquisition of PharmaSource BV
completed on 24 January 2020, therefore just
over 11 months of trading is consolidated into
the Group results for 2020 in the amount of
€3.1m (£2.76m).
The integration process of both commercial
and finance operations has been completed
smoothly and good commercial progress has
been made since acquisition. We saw good
sales growth in both the UK and The
Netherlands in 2020 - two new products were
launched with our Dutch partner Perrigo, we
launched a woman’s intimate product with a
Dutch retail chain called “DA”, which operates
200 stores in The Netherlands, we partnered
with Lloyds Pharmacy in the UK with the Wart
and Verruca pen and we signed a five-year
agreement with a new partner in the UK.
Furthermore, we completed 6 new
agreements with partners outside of these
core markets, which confirms there is
significant interest in these newly acquired
products from PharmaSource.
Finally, 2020 saw the successful completion
of technical audits carried out by the relevant
notified bodies on the nail fungal pen, wart
pen, wart plasters and BV gel. The next
regulatory audits will be May 2022.
Customer Brands
Revenues from Customer Brands rose by 12%
to £15.2 million (2019: £13.5 million). This was
driven by a combination of new business from
both new customers and existing customers.
Notably in the period, we began as a second
manufacturer for the Kelocote brand for
Alliance Pharma, one of our key customers.
Production of this only began in Q4 of 2020
and will continue in 2021. The growth in
revenue was attenuated by some customers
who were adversely affected by COVID-19,
delaying launches or orders, and this was also
witnessed with some international customers
of the Venture Life Brands. As we emerge from
the pandemic in 2021, we would hope to see
these customers return to the previous
expected level of sales.
Summary & Outlook
In this quite extraordinary year where the
whole world has been affected by the COVID-
19 virus, the Group has demonstrated its
resilience and its robust business model to
deliver outstanding growth, at a time when
many businesses have seen a substantial
contraction or even a halt to their operations,
and this was despite experiencing delays
from a number of our UK and international
customers due to COVID-19.
During this difficult year, we were also able
to acquire and successfully integrate the
PharmaSource business into the Group and
deliver continued growth from that business
throughout 2020.
The team within Venture Life has shown
it can adapt and prosper in a changing and
challenging environment, and continue
to provide the service and products to its
customers around the world. I would like
to thank the entire team, and in particular the
team at Biokosmes, for their hard work and
perseverance during the year, dealing with the
significant challenges thrown up by COVID-19
and ensuring that our business continued
uninterrupted. I would like to welcome the
PharmaSource team into the Venture Life
family and look forward to more success in
2021. I would also like to thank our customers
and suppliers for their continued support and
work with us during this difficult time. Finally,
thank you to our shareholders, existing and
new, for their on-going support of both our
team and our vision.
The end of 2020 and the start of 2021 saw
another extended period of lockdown across
the markets in which we operate, similar to that
seen in the first half of 2020, and in 2021 the
Group will seek to consolidate the growth seen
in 2020. Then through the application of its
free cash to selected earnings enhancing
acquisitions the Group expects to continue
to deliver acquisitive growth, and as markets
begin to ease out of lock down, also deliver
organic growth. I expect growth in revenues
to deliver growth in earnings and I look forward
to updating shareholders during what is sure
to be an exciting 2021 for Venture Life.
Jerry Randall
Chief Executive Officer
24 March 2021
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Strategic Report
A Responsible Business
To be a trusted global leader in the self-care market,
we must ensure that we behave in a socially and
environmentally responsible manner
Our People
Diversity
Health & Safety
We are committed to providing equal
opportunities in employment. All job
applicants and employees receive equal
treatment regardless of sex, race, colour,
age, nationality or ethnic origin. We
employ 8% more women than men.
Our employees are key to our success
and we value each and every person who
works for us. We currently employ 119
employees and are committed to
investing in and supporting their careers.
The UK, Italy and The Netherlands offices
work very closely together and as a
company, and we look to nurture new talent
by supporting people at the early stages of
their careers. We then promote and transfer
people into new roles within the Company.
Individual high performances are recognised
and we nurture personal development and
continuous improvement, rewarding and
recognising the contribution of our people.
We recognise the necessity of safeguarding
the health and safety of our own employees
whilst at work. We operate to provide a safe
and comfortable working environment for
employees and visitors. Our policy is to
manage our activities to avoid causing any
unnecessary or unacceptable risks to health
and safety.
We have a rigorous COVID-19 safety policy
in place to protect our employees in all three
offices, and our manufacturing facility has
strict procedures in place that include:
• Temperature sensors for external visitors
and internal staff
• Deep-clean after every manufacturing shift
• Strict social distancing measures
• Full PPE for factory employees
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Environment & Sustainability
Charitable Support
Awards
During the peak of the virus in the North
Lombardy area of Italy in 2020, we
supported local hospitals and pharmacies
by donating free supplies of sanitiser gel
produced at our manufacturing facility, to
support the fight against the virus.
We also support the Alzheimer’s Society
charity on an annual basis.
Our people are committed to and
motivated by the success of the
Company. For a fifth consecutive year,
we were once again included as one of the
companies listed in the London Stock
Exchange’s publication 1000 Companies
to Inspire Britain – a publication that
recognises businesses across the UK that
outperform their peers. This is a strong
testament to the dynamic team we have
at Venture Life.
Venture Life has developed specific
environmental actions, in particular with
regard to energy and water management.
Our manufacturing facility has a
photovoltaic, solar-powered electric
generating system, which covers about
60% of the manufacturing facility’s need.
In regards to water resources, our osmotic
plant is closed-cycle, which results in
significant water savings.
Biokosmes has won a tender funded by
the SMART project. The project offers
training, analysis and assessment of the
company’s sustainability status and
identifies potential actions to increase
aspects of the Group’s Corporate Social
Responsibility.
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Strategic Report
Principal Risks and Uncertainties
Creating quality outcomes by managing risk
Non-financial risks
Reduction in demand
for products
Customer-specific risk
Delay in regulatory
approval
Supply chain risk
Adverse foreign exchange
movements affecting
profitability
No change in risk
Increase in risk
Decrease in risk
The Group’s product distribution agreements generally give market exclusivity to its distribution partners
for a period of five or ten years. While such agreements impose minimum annual purchase obligations, if
any of the Group’s partners fails to meet its minimum purchase obligations, the Group’s expected revenues
and profits could be negatively affected. Such negative impact would continue until either the partner is
able to meet its minimum purchase obligations or until the Group is able to find an alternative commercial
partner for that market.
A significant proportion of revenue from our Development and Manufacturing business is derived from
a relatively small number of customers. The percentage of this segment’s total revenue generated by its
top five customers in the years ended 31 December 2017, 2018, 2019 and 2020 was 56%, 50%, 40%
and 64% respectively as we diversify our customer base through growth. The loss of any customer or
group of customers which represents a significant proportion of revenue could have a negative impact
on the Group’s operating results and cash flow.
The Group’s products are primarily approved for use as medical devices, functional cosmetics and
food supplements that, in certain regions including Europe, require pre-market notification but not
pre-market authorisation or approval by the relevant authorities. Certain changes in Medical Device
Regulations (MDR) are taking effect in 2021.
In other regions of the world where the Group either has distribution agreements in place or is actively seeking to
establish them, the procedure for registering and having products authorised may differ from that in Europe. Other
jurisdictions may require more lengthy registration and authorisation processes and the Group will be relying on its
distribution partners to carry out this work in a timely manner. This in turn may lead to delays in product launches in
certain territories but the Group works closely with its partners to support them through the process.
The Group relies extensively on third parties for many of its activities, including raw material supply, logistics,
distribution and sales of its products. The Group is therefore at risk of under-performance by third parties,
exploitation by third parties of the Group’s commercial dependence and by unforeseen interruptions to third
parties’ businesses. To mitigate this risk, the Group works with a variety of vendors and aims not to
be over-reliant on any one particular vendor.
The Group is reliant on its Development and Manufacturing business for supply of products and there
is a risk of supply chain interruption as a consequence of events such as fire, flooding or Brexit-related issues.
The Group mitigates this risk by observing its own health and safety policies, as well as by taking practical
measures such as the installation and maintenance of a fire alert and fire prevention system in its factory
and ensuring a plentiful stock position in the UK through Brexit.
The Group’s revenues are denominated in euros and sterling. However, the Group’s presentational currency
is sterling and therefore the reported revenues will depend on exchange rates prevailing during the relevant
financial period.
The majority of the Group’s cost of sales are denominated in euros and 78% of the Group’s revenues
are denominated in euros. The Group is therefore not unduly exposed to adverse movements in the
euro/sterling exchange rate in relation to its gross profit. The Group’s administrative expenses arising
in Italy represent a material component of overall Group administrative expenses. These expenses are
denominated in euros and when reported on a consolidated basis, they will be reported in the Group’s
presentational currency of sterling. Consequently, there may be variability in the presented expenses
caused by variability in the sterling/euro exchange rate.
The Group actively monitors the principal foreign exchange rates and will adopt hedging strategies
when it is felt to be appropriate.
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Financial risks
Financial risk management
Financial risk factors
Market risk
Credit risk
Liquidity risk
The Group seeks to minimise its exposure to financial risk through issue of its own equity instruments and
debt to fund operating and investing activities. Where it is necessary to utilise debt funding, the terms of the
financing are reviewed against future cash flow expectations to ensure that there are sufficient resources
for the Group to meet its obligations under the financing arrangements. Further details relating to the
Group’s exposure to financial instrument risks are provided in Note 3.14.
The Group’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk.
The Group’s overall risk management programme focuses on the unpredictability of financial markets
and to minimise potential adverse effects on the Group’s financial performance.
Risk management is carried out by management under policies approved by the Directors. Management
identifies and evaluates financial risks in close cooperation with the Group’s operating segments.
The Directors provide principles for overall risk management, as well as policies covering specific areas,
such as interest rate risk, non-derivative financial instruments and investment of excess liquidity.
Market risk is the risk of loss that may arise from changes in market factors such as interest rates
and foreign exchange rates. The Group monitors market risk factors and regularly reviews business
forecasts to assess the impact of changes in market conditions.
Credit risk is the financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligation. Credit risk arises from the Group’s cash and cash equivalents and
receivables balances. The Group mitigates this risk by requiring upfront payments from new orders
with new customers and monitoring the composition of the Group’s monthly debtor book.
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
This risk relates to the Group’s prudent liquidity risk management and implies maintaining sufficient cash
reserves. Management monitors rolling forecasts of the Group’s liquidity and cash and cash equivalents
on the basis of expected cash flow.
Capital risk management
The Group’s capital structure is comprised of shareholders’ equity, invoice financing and unsecured
commercial debt.
Brexit risk
COVID-19
The Group’s objective when managing capital is to maintain adequate financial flexibility to preserve
its ability to meet financial obligations, both current and long-term. The capital structure of the Group
is managed and adjusted to reflect changes in economic conditions.
The Group funds its expenditures on commitments from existing cash and cash equivalent balances,
primarily received from issuances of shareholders equity and loan arrangements. There are no externally
imposed capital requirements.
Financing decisions are made by the Directors based on forecasts of the expected timing and level of
capital and operating expenditure required to meet the Group’s commitments and development plans.
The Group has operations in the UK, The Netherlands and Italy. At the moment there is limited clarity
on the exact impact on UK-based businesses that trade internationally. The significant proportion of the
Group’s operations is based in mainland Europe so will not be affected by Brexit. In fact, with the majority
of our operations based in the EU, Venture Life is more immune to the potential implications of Brexit
compared to most UK businesses. The main issue that may affect the Group could relate to import duties
on products manufactured outside of the UK, but imported into the UK for sale. Approximately 78% of the
Group’s revenues are invoiced or shipped out of Italy, in euros, and therefore do not come into the UK and
would not be subject to any import tariffs. The remaining 22% currently represents the sales of UltraDEX,
Dentyl and DISINPLUSTM which are manufactured in our plant in Italy, then imported to the UK and sold to
customers. It is possible that these imports could be subject to import duties, which would increase the
cost of these items that we sell in the UK, reducing gross margins on the product. As we manufacture
these products ourselves, we already have good gross margins on the products with which to absorb
these increases. However, if these increases become particularly onerous, we already have in place
secondary suppliers in the UK that would be able to produce the goods at a better price than that if
import duties were imposed, thus maintaining our margins on these products.
As at 24 March 2021 the Group’s business units in the UK, The Netherlands and Italy are operational.
The Group’s Italian manufacturing facility is considered an essential business. Shipments of finished goods
to customers are continuing as are invoicing and cash collection processes. The majority of the Group’s
customers are large organisations and it is the opinion of the Directors that bad debts will remain a relatively
low risk. Accordingly, the Directors have evaluated a range of scenarios all representing varying months of
closure of the business and associated losses of marginal gross profits and forsee the company has
sufficient resources to continue in operational existence for the foreseeable future and to comfortably
make scheduled loan repayments as they fall due.
Venture Life Group plc Annual Report & Accounts 2020
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Strategic Report
Our Section 172(1) Statement
Our key stakeholders
The table below highlights our key stakeholders, and why and how we engage with them. them.
Who?
Why?
How?
Our key stakeholders
Their importance to our long-
term success
The methods we use to engage and
understand and their issues
The Company’s key stakeholders include
the following parties:
•
• Our dedicated workforce of 119
• The sell-side analysts of the market
Our many Shareholders
in which we are listed
• Our many dedicated Suppliers of raw
materials, packaging, other products
and services
• Our portfolio of Customers across
the world
• The local communities in territories
in which we operate
• The environment
• The national and international regulators
applicable to our products
• Our NOMAD brokers, auditors, legal
counsel and other professional advisors
Key Stakeholders play a major role in the
continuing operation of the business in
many forms:
Strategic decision making, including
providing input and advice in relation to
prospective activities which can include
fundraising, M&A activities, allocation of
cash across business segments and
other activities.
Operational matters, aimed at ensuring the
business operates with maximum efficiency
as well as adopting a pragmatic approach to
planning, forecasting and prioritisation.
Compliance, ensuring the company
complies fully with regulatory, legal and
other legislative requirements.
Our CEO leads the interactions with
shareholders, NOMAD brokers, and
other professional advisors, supported
by other Executives.
Individual executives operate openly
with their teams to ensure a united and
coordinated effort by the workforce to meet
Group objectives. These executives plus their
teams of Directors and Managers also
interact with the portfolio of Customers and
Suppliers to maximise the achievement of
company operating performance.
Our CFO leads the interactions with sell-side
market analysts to ensure forward looking
market forecasts are appropriate.
The interaction with national and
international regulatory bodies is lead
from our Head of R&D & Technical in
consultation with the executives.
All Executives are experienced, qualified
individuals and act with skill and integrity.
Board papers are prepared with diligence
and are issued ahead of each Board meeting
to enable attendees to thoroughly pre-read.
Training is undertaken as required in specific
areas to supplement skills and experience.
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Our principal decisions
We describe below how the Directors had regard to key stakeholders when making principal decisions during the year.
Principal decisions
Key stakeholders
More information
Principal decisions included:
The Group’s strategic drivers include:
The acquisition of PharmaSource BV
is addressed in the CEO report and also
in Note 14 Business Combinations.
Environmental factors are important
to the Group and our culture.
a) Revenue growth and
b) “Buy & Build”, in which the Directors are
continually exploring business targets that
fit against a number of set criteria, and
c) “Maximise automation and factory
throughput” in order to continuously
improve cost-of-goods, and
d) “Care for the environment” which includes
a range of measures associated with the
selection of ethical and safe product
ingredients, the efficient consumption of
energy and the fair treatment of waste.
a) The decision to build balance sheet
strength by means of an equity raise
during the fourth quarter of 2020 in
order to provide more funds for the
Group’s “Buy & Build” programme;
b) The decision to focus on increasing
revenue through the business from
all sources to maximise the operational
leverage we have and hence maximise
profit and cash flow;
c) The decision to progress and ultimately
acquire PharmaSource BV (completed
24 January 2020) following a substantial
due diligence exercise.
In making this decision the Directors
carefully considered the conflicting
interests expressed by some shareholders
of the short-term merits of maintaining
excess cash in the balance sheet versus
the longer-term merits of making the
acquisition.
d) The decision made during the year to
supply hand gel free of charge to hospitals
and pharmacies in the Lombardy area of
Italy in response to COVID-19.
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Strategic Report
Financial Review
The Group delivered a very positive set of
results for the year as the execution of the
Buy and Build strategy continued
Statement of Comprehensive Income
The Group reported 2020 revenues of
£30.1 million, an increase of 49% over the
£20.2 million reported in 2019. The Group
comprises of two segments: Venture Life
Brands and Customer Brands. The Venture
Life Brands business reported strong growth
of 123% to £14.9 million (2019: £6.7 million).
The Dentyl brand grew by 80% to £4.3 million
in 2020 (2019: £2.4 million) reflecting a strong
UK performance where the brand benefitted
from new listings and a positive response to
some independently published in-vitro data by
Cardiff University, as well as the onset of higher
sales to China per the new agreement entered
into with the distribution partner in April 2020.
UltraDEX net sales declined 4% to £3.0 million
in 2020 (2019: £3.2 million) as declines in the
UK arising from periods of lockdown
outweighed some significant improvement in
sales to some international partners. As a
consequence of the COVID-19 setting, the
Group developed a range of hand sanitiser
gels (HSGs) and established a new business
unit which delivered £3.6m in net sales and
accounted for 18% of the total Group sales
growth. The PharmaSource business,
acquired on 24th January 2020, delivered
ahead of our expectations in the amount of
£2.8m net sales and accounted for 14% of the
total Group sales growth. Sales of the Group’s
other branded products grew 11% reflecting
a blend of increasing geographic footprint
coupled with volume growth and some
distributor churn.
The Customer Brands business reported
revenues (excluding intercompany sales) of
£15.2 million, an increase of 12% from 2019.
As well as developing and manufacturing the
majority of the Venture Life brands, this part
of the business is also focused on the
development and manufacture of products
on behalf of third parties to be sold under their
brands and the growth is partly attributable
to newly launched assets. As a result of the
timings of both the hand sanitiser gel business
and the sales to China, the revenue in 2020
was phased 56% in the first half of 2020 and
44% in the second half in contrast to prior
years, which had typically experienced higher
revenues in the second half.
Andrew Waters Chief Financial Officer
Highlights
• Business remained fully operational as a Going Concern
despite the COVID-19 context
• 49% year-on-year revenue increase, mostly organic
• Integration of the PharmaSource BV business, acquired
on 24 January 2020
• Improved gross margin of 42.7% (2019: 39.6%)
• Positive operating cash flow
• Placing and Open offer raised £34.1 million net of
expenses during Q4 2020
• Additional €3.5m debt raised on attractive terms
The Group delivered a very positive set of
results for the year as the execution of the
Buy and Build strategy continued, leading to
the progression of greater revenues through
the infrastructure. Gross Profit increased both
commensurately with sales growth plus a
noteworthy margin improvement and, through
the impact of leverage against a relatively fixed
operating cost base, led to all other profitability
measures (adjusted-EBITDA, operating profit,
pre-tax profit and post-tax profit) increasing
substantially as did all measures of operational
cash flow.
24
Venture Life Group plc Annual Report & Accounts 2020
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Results for the year
2020 2019 Change
£000s £000s %
Revenue 30,076 20,206 49%
Gross profit 12,847 8,003 61%
Gross profit margin 42.7% 39.6%
Amortisation (909) (579)
Other income 169 163
Exceptional items (167) (208)
Operating profit 3,555 1,278 178%
Operating profit margin 11.8% 6.3%
Net Finance expense (279) 84
Profit before tax 3,276 1,362 141%
Tax (908) (458)
Profit after tax 2,368 904 162%
Earnings per share
Basic / pence 2.74 1.08 154%
Diluted / pence 2.53 1.01 150%
Annual dividend per share / pence - -
Net cash at end of period / £000s 35,479 6,336
Return on capital employed 5.8% 3.2%
The Group generated gross profit of
£12.8 million representing a gross margin of
42.7%, which compared favourably to a gross
margin of 39.6% for 2019. This notable
improvement due to several factors including:
a) favourable mix variances arising from
inclusion of PharmaSource products
at higher average margin;
b) favourable mix variances arising from the
higher portion of revenues arising from
Venture Life Brands, and;
c) factory volume/efficiency variances,
this being a clear demonstration of one
of the strategies of the group to increase
factory throughput and deliver leverage
against those factory cost components
that are relatively more fixed.
The Euro fluctuated against Sterling a little
during 2020 with a net strengthening in the
region of 5% which had an overall small
positive impact on the reported operating
profit of the Group as most of the Group’s
gross margins were euro denominated.
Administrative expenses increased in the
period to £9.3 million from £6.7 million in 2019,
an increase of £2.6 million. Of this increase,
£0.5 million related to the inclusion of
PharmaSource operations, £0.9m comprised
higher non-cash costs of amortisation,
depreciation & share-based payments arising
from the PharmaSource acquisition, higher
factory capital investment for growth and new
stock option issuances in January 2020, and
the remaining increase of £1.2 million included
additional COVID-19 costs of £0.5 million and
an increase in debtor provision of £0.4 million
to yield a balance of £0.3 million reflecting
inflationary increases on base expenditures.
Exceptional costs of £167,000
(2019: £208,000) related to legal and
professional fees incurred in the completion
of the acquisition of the PharmaSource BV
business (acquired on 24 January 2020), as
well as due diligence activities conducted in
the year on prospective acquisition targets.
Operating profit was £3.6 million
(2019: £1.3 million) with the profit before tax for
the Group of £3.3 million (2019: £1.4 million).
The Group reported profit after tax of
£2.4 million (2019: profit of £0.9 million).
Finance costs were £0.3 million (2019: credit
of £0.1 million) and comprised interest payable
on an expanded portfolio of euro loans
coupled with foreign exchange losses arising
principally upon settlement of the deferred
euro-denominated consideration payments
for the acquired PharmaSource business
during a year of sterling depreciation.
These translated into basic earnings per share
of 2.74 pence (2019: 1.08 pence), with the
improvement in business performance
generating enhanced shareholder value. The
number of shares in issue as at 31 December
2020 was 125,831,530. (31 December 2019:
83,712,106) and the weighted average number
during 2020 was 86,402,007 (2019: 83,712,106).
The pace of growth of business across the
year, coupled with stock building for Brexit and
COVID-19 restrictions, inevitably resulted in a
significant flux of funds into working capital in
the amount of £3.1 million (2019: £(0.1) million)
and as a result of this the net cash from
operating activities was £2.7 million in 2020
(2019: £2.4 million). Cash used in investing
activities amounted to £7.5 million
(2019 £1.1 million) and comprised the
purchase consideration for the acquisition of
PharmaSource BV of £5.5 million, £1.2 million
of capital investment into the Italian factory
and £0.8 million of capitalised development.
Net cash from financing activities was
£36.3 million (2019 £0.1 million) and
comprised the 2020 4th quarter placement
and open offer proceeds of £34.1 million
(comprising £36.0 million of gross proceeds
less £1.9 million of transaction expenses),
£0.9 million from the successful exercise of
staff stock options and the inclusion of three
new Euro loans in the amount of €3.5 million
less scheduled Euro loan repayments of
€0.9 million together with revolving invoice
financing drawdowns and repayments of
£2.3 million and £2.6 million respectively.
Overall cash and cash equivalents increased
during the year by £31.4million (2019 an
increase of £1.4 million). Cash and cash
equivalents less interest bearing borrowings
increased during the year from £3.7 million
at the start of the year to £30.9 million at the
end of the year.
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Strategic Report
Financial Review
continued
Gross margin
42.7%
(2019: 39.6%)
Placing and Offer raised
£34.1m
net of expenses during Q4 2020
Cash and debt
Cash and cash equivalents at the year-end
totalled £42.1 million (2019: £10.7 million)
having been boosted during the fourth quarter
by the successful Placing and Open offer
which netted £34.1 million. Net cash inflow
during 2020 amounted to £31.4 million with
the increase in cash balances accounted
for as follows:
• Operating cash flow before tax payments
and movements in working capital - inflow
of £6.7 million
• Changes in working capital comprising
inventory build, debtor build less creditor
build – outflow of £3.1 million;
• Tax payments and Finance costs
– outflow of £0.9 million
• Acquisition of PharmaSource BV
•
– outflow of £5.5 million
Investment in manufacturing facility
equipment (£1.2 million) and intangible
development assets (£0.8 million)
– outflow of £2.0 million
• Raising of Equity – inflow of £35.0 million
(including £34.1 million via Placing and
Open Offer and £0.9 million through stock
option exercises)
• Drawdown of Financing (£5.4 million) less
repayments and Finance lease repayments
(£4.2 million) – inflow of £1.2 million
Statement of Financial Position
Intangible non-current assets increased
by £6.3 million in the year and comprised the
acquisition of the PharmaSource intangible
assets in January 2020 (£5.5 million),
capitalised development costs of £0.7 million
and continuing investment in patents and
trademarks of £0.1 million, partially offset by
ongoing amortisation and including a
substantial fx gain on euro denominated
assets arising as a result of retranslating the
goodwill and other intangible assets of the
foreign operations at the closing spot rate,
as discussed in notes 32 Prior period
adjustment and 3.4 Foreign currencies,
affecting the goodwill and fair value of other
intangible assets acquired in 2014 as part of
the acquisition of Biokosmes S.r.l. Capitalised
development costs are carried in the amount
of £2.0 million and reflect the recent peaking
in workflow assisting our customers with
formulation upgrades and changes to the
Medical Device regulations arising in 2020.
Whilst consuming cash, this investment
continues to be value-enhancing through
strengthening relationships with our
customer base.
Property, plant and equipment increased
by £2.9 million reflecting significant net
additions in factory equipment of £1.2 million
as part of the expansion programme plus a
technical IFRS16 net addition of £2.5 million
recognising the extension of the factory lease
through to 2031 offset by ongoing
depreciation and including a small
fx gain on euro denominated assets.
Inventory increased by 75% versus 2019.
This was intentional in order to build stocks of
finished goods as part of the Group’s BREXIT
contingency plans to ensure strong levels of
inventory in UK warehouse facilities ahead of
the BREXIT date of 31st December 2020
coupled with an increase in raw materials
inventories to ensure uninterrupted ongoing
production during the pandemic.
Trade receivables and trade payables grew
at rates of approximately 20% and 30%
respectively, which remained broadly
commensurate with the rate of sales growth
when reflecting the phasing of the sales in
2020 compared with 2019.
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Cash flow and net cash
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Operating cashflow before movements in working capital 6,705 2,951
Change in working capital (3,053) (131)
Cash generated from operations 3,652 2,820
Finance costs (50) 32
Income taxes paid (896) (412)
Net cash inflow from operating activities 2,706 2,440
Cash outflow from investing activities – acquisitions (5,465) (0)
Cash outflow from investing activities – additions (2,069) (1,145)
Cash inflow from financing activities – equity raise 35,040 (0)
Cash inflow from financing activities – other financing 1,231 112
Increase in cash and cash equivalents 31,443 1,406
Cash and cash equivalents beginning of year 10,710 9,623
Effect of foreign exchange rates (58) (319)
Cash and cash equivalents at end of year 42,095 10,710
Net cash, excluding finance lease obligations,
increased from £6.3 million as at 31 December
2019 to £35.5 million as at 31 December 2020.
The Group is financed by a range of largely
Euro denominated interest-bearing loans of
varying maturities, comprising of invoice
financing and unsecured bank loans. Total
debt increased from £7.0 million to £11.2
million and reflects the inclusion of additional
€3.5 million of Italian euro denominated loans
from Banco Popolare Milano S.r.l and Banco
Unicredito S.r.l less on-going repayments of
€0.9 million, a small net repayment of our
invoice financing facility and the technical
IFRS16 inclusion of a £2.5 million debt
component of the Italian factory finance
lease extension.
Given the net cash position at the year end,
the Group is extremely comfortable with the
level of debt in the business, which is being
used to finance growth and investment. The
Directors have prepared detailed forecasts
looking beyond 12 months from the date of
these financial statements and expect the
Group to continue to operate profitably in the
foreseeable future, generate positive operating
cashflows and comfortably meet all scheduled
loan repayments as they fall due.
Taking everything into account this has been
a strong year for the business, which has
experienced very strong organic growth,
as well as completed the acquisition of
PharmaSource BV, its latest addition.
The Group has delivered a robust
performance in 2020 with strong and growing
operating profit, pre-tax profit, post-tax profit
and operating cashflow. The start of 2021 has
been positive with continuing momentum to
the sales and a solid order book. The Group
continues to manage the impact of COVID-19
on the business and the uncertainty that this
might bring. Following analysis and
consideration of even an extreme worst-case
scenario, the directors believe that the Group
has sufficient resources to continue in
operational existence for the foreseeable
future and to comfortably make scheduled
loan repayments as they fall due. The Directors
therefore conclude that the Going Concern
basis remains the appropriate basis upon
which to prepare the Group’s financial
statements.
Andrew Waters
Chief Financial Officer
24 March 2021
Venture Life Group plc Annual Report & Accounts 2020
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Corporate Governance
Board of Directors
Leading with
an experienced team
Dr Lynn Drummond
Non-Executive Chair
Jerry Randall
Chief Executive Officer
Sharon Daly (née Collins)
Chief Commercial Officer
Gianluca Braguti
Chief Manufacturing Officer
Appointed
November 2013
Appointed
March 2010
Appointed
March 2010
Appointed
March 2014
Background
Sharon co-founded Venture Life
in 2010. Sharon has over 20
years’ experience within the
healthcare industry,
predominantly in marketing,
international sales and business
development roles. She worked
for a leading dental manufacturer
for seven years and launched
many products during this time.
Sharon worked for Sinclair
Pharmaceuticals for five years
within the International Business
Development field. She qualified
from Lancaster University in 1996
with a degree in Marketing and
gained her MBA (with Distinction)
in 2005.
Background
Gianluca joined the Board
in March 2014 following the
acquisition by Venture Life of
Biokosmes, the company
he founded.
Gianluca began his career
working in his father’s pharmacy
and then, after he graduated as a
pharmacist, continued working
for several years in the Milano
University cosmetic research and
development department
researching cosmetic
applications for raw materials
used in different fields. In 1990 he
started developing formulations
for Italian cosmetic brands mainly
in the perfumery and pharmacy
area and started his experience in
contract manufacturing business,
Biokosmes. In 1999 Biokosmes
started developing and
manufacturing medical devices,
selling predominantly in Europe.
In 2002 Biokosmes passed its
first FDA inspection, and started
exporting its products to the US.
Background
Lynn joined Venture Life as
Non-Executive Chair in
November 2013. Lynn has been
Non-Executive Chairman of Infirst
Healthcare Limited since early
2013 and is also a Non-Executive
Director of RPC Group plc.
Previously Lynn spent 16 years
at Rothschild in London, most
recently as a Managing Director
within the investment banking
division, with a particular focus
on transactions within the
healthcare sector.
Prior to Rothschild, Lynn worked
in the Cabinet Office in London
as Private Secretary to the Chief
Scientific Adviser.
Lynn holds a Bachelor of Science
Degree in Chemistry from the
University of Glasgow and a
PhD in Biochemistry from the
University of London. She is also
a Fellow of the Royal Society of
Chemistry and a Fellow of the
Royal Society of Edinburgh.
Committee memberships
Lynn chairs the Group’s
Nomination Committee and
is a member of the Audit and Risk
and Remuneration Committees.
Background
Jerry co-founded Venture Life
in 2010. From 2000 to 2009,
Jerry was CFO and co-founder
of Sinclair Pharma plc, an AIM
listed international specialty
pharma business, now listed on
the AIM market in London.
Sinclair was founded in August
2000 when Jerry completed the
management buy-in. Jerry was
also on the Board of Silence
Therapeutics plc, an AIM listed
biotech development business,
from 2008 to 2013. Initially a
Non-Executive Director,
Jerry became a Non-Executive
Chairman in 2010 and moved
to Executive Chairman in 2012.
Jerry enjoyed a career initially
in corporate finance and was
involved in buy-ins and acted as
adviser to both private and
quoted companies between
1993 and 2000, in capacities as
nominated adviser and in practice
with KPMG. Jerry has been
involved in a number of flotations
and transactions on the Official
List, Unlisted Securities Market
and AIM, as well as raising private
equity. He qualified as a chartered
accountant with KPMG in 1990.
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Andrew Waters
Chief Financial Officer
Giuseppe Gioffrè
Group Financial Controller
and Company Secretary
Carl Dempsey
Non-Executive Director
Peter Bream
Non-Executive Director
Appointed
May 2019
Appointed
January 2019
Appointed
September 2018
Appointed
February 2016
Background
Andrew joined Venture Life as
Chief Financial Officer in May
2019. Andrew is a Chartered
Accountant having previously
worked at PWC and then
GlaxoSmithKline plc, where he
spent 16 years in various financial
and business management
positions.
Following this, Andrew
co-founded two businesses,
Cubase Consulting Ltd and
Infirst Healthcare Ltd, which he
progressed as Chief Financial
Officer through three successful
funding rounds, raising in excess
of £40 million from private equity.
Background
Giuseppe manages the
operational finances as Group
Financial Controller and provides
Company secretarial support to
the Board and assists with
finance matters as required.
Giuseppe started his career as a
business management and fiscal
adviser before joining Biokosmes,
the manufacturing facility of
Venture Life Group in 2014.
Giuseppe has a Master of
Science in public administration
and international institutions
management obtained at
Bocconi University in Milan. He is
a Certified Chartered Accountant
and certified registered auditor.
Background
Peter Bream joined Venture Life
in February 2016. Formerly the
Group Finance Director of
Alcontrol Laboratories, Peter has
over 20 years in international
business including as a CFO of
public companies in the
pharmaceuticals, engineering
and chemical sectors.
Peter has a degree in
Engineering and Management
from Cambridge University and
is a Chartered Accountant.
Committee memberships
Peter chairs the Group’s Audit
and Risk Committee and is a
member of the Remuneration
and Nomination Committees.
Background
Carl Dempsey joined the Venture
Life board as Non-Executive
Director in September 2018.
Until recently, Carl was Worldwide
Vice President Global Customer
Management at Johnson &
Johnson (“J&J”) where he was
responsible for global sales
of US$3.6 billion across
22 countries.
During his 29 year career at J&J,
Carl had particular responsibility
for developing the Health and
Wellness Partnership strategy.
He also led the successful
integration of Pfizer Consumer
Healthcare across Europe, Africa
and the Middle East which
included the mouthwash brand.
Committee memberships
Carl chairs the Group’s
Remuneration Committee and is
a member of the Audit and Risk
and Nomination Committees.
Venture Life Group plc Annual Report & Accounts 2020
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Corporate Governance
Statement of Corporate Governance
Introduction
The Board is accountable to the Group’s shareholders for good
corporate governance and it is the objective of the Board to attain
a high standard of corporate governance. As an AIM-quoted company,
full compliance with the UK Corporate Governance Code (“the Code”)
is not a formal obligation. The Group has not sought to comply with the
full provisions of the Code; however, it has sought to adopt the
provisions that are appropriate to its size and organisation and establish
frameworks for the achievement of this objective and has adopted the
principles of the Quoted Company Alliance (“QCA”) Code. The ten
principles of the QCA Code are detailed in the Investor Relations
section of the Group’s website (www.venture-life.com/investor-
relations/corporate- governance/). This statement sets out the
corporate governance procedures that are in place.
The Board
During the year, the Board of Venture Life Group plc comprised of
three Non-Executive Directors, one of whom chaired the Board, and four
Executive Directors. The roles of Chairman and Chief Executive Officer
are distinct and are held by different people to ensure a clear division
of responsibility. The role of the Non-Executive Directors is to bring
valuable judgement and insight to Board deliberations and decisions.
The Non-Executive Directors are experienced and influential individuals
whose blend of skills and business experience contributes to the proper
functioning of the Board and its Committees, ensuring that matters are
fully debated and that no individual or group dominates the Board’s
decision-making processes.
All Directors have access to the advice and services of the Company
Secretary and are able in the course of their duties, if necessary, to take
independent professional advice at the Company’s expense.
Committees have access to such resources as they are required
to fulfil their duties.
The Board receives regular reports detailing the progress of the Group’s
business, the Group’s financial position and projections, as well as
business development activities and operational issues, together with
any other material deemed necessary for the Board to discharge its
duties. The Chairman is primarily responsible for the effective operation
and chairing of the Board and for ensuring that it receives appropriate
information to make informed judgements.
The Board has a formal schedule of matters reserved to it for decision,
but otherwise delegates specific responsibilities to Committees,
as described below. The terms of reference of the Committees are
available on request from the Company Secretary. The Board is
responsible for decisions, and the review and approval of key
policies and decisions in respect of business strategy and
operations, Board appointments, budgets, items of
substantial investment and acquisitions.
Board Committees
The Board has established an Audit and Risk Committee, a Nomination
Committee and a Remuneration Committee with written terms of
delegated responsibilities for each.
The Audit and Risk Committee
The Audit and Risk Committee is chaired by Peter Bream. The other
members of the Committee are Carl Dempsey and Dr Lynn Drummond.
The Committee has responsibility for considering all matters relating to
financial controls and reporting, internal and external audits, the scope
and results of the audits, the independence and objectivity of the
auditor, and keeping under review the effectiveness of the Company’s
internal controls and risk management. The Audit and Risk Committee
is expected to meet at least twice a year.
During 2020 the Audit and Risk Committee reviewed the outcome
of the 2019 external audit and the outcome of the 2020 half-year review.
The committee was satisfied with the objectivity and performance and
elected to reappoint the current auditors for the full year 2020 audit.
The committee considered the control environment in the light of the
on-going COVID-19 situation which included assessing the extent
to which the existing internal controls would continue to operate with
multiple staff now working from a home setting. The Committee also
developed guidance to the level of trade debtor exposure that would
be permissible in this environment, including guidance on the principles
to consider when determining the maximum exposure to China.
The Remuneration Committee
The Remuneration Committee is chaired by Carl Dempsey. Lynn
Drummond and Peter Bream are the other members of the Committee.
The Committee has responsibility for making recommendations to the
Board on the Company’s policy for remuneration of Senior Executives,
for reviewing the performance of Executive Directors and senior
management and for determining, within agreed terms of reference,
specific remuneration packages for each of the Executive Directors
and members of senior management, including pensions rights,
any compensation payments and the implementation of executive
incentive schemes.
The Remuneration Committee meets at least once a year.
Further details of Directors’ remuneration are disclosed in the
Directors’ Remuneration Report.
The Nomination Committee
The Nomination Committee is chaired by Lynn Drummond, with
Carl Dempsey and Peter Bream as the other members of the Committee.
The Committee has responsibility for considering the size, structure
and composition of the Board, and the retirement and appointment
of Directors, and will make appropriate recommendations to the
Board about these matters.
The Nomination Committee is expected to meet at least once a year.
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Internal control and risk management
The Board has ultimate responsibility for the systems of risk
management and internal control maintained by the Group
and for reviewing their effectiveness.
The Board’s approach is designed to manage rather than eliminate risk and
can provide only reasonable and not absolute assurance against material
misstatement or loss. It operates with principles and procedures designed
to achieve the accountability and control appropriate to the business.
The Group does not consider it necessary to have an internal audit
function due to the small size of the administrative function. Instead
there is a detailed Director review and authorisation of agreements and
transactions. A comprehensive budgeting process is completed once
a year and is reviewed and approved by the Board. The Group’s results,
compared with the budget, are reported to the Board on a regular basis
and discussed in detail.
The Group maintains appropriate insurance cover in respect of actions
taken against the Directors because of their roles, as well as against
material loss or claims against the Group. The insured values and type
of cover are comprehensively reviewed on a periodic basis.
The principal features of the Group’s internal control system are as follows:
• an organisational structure is in place with clearly drawn lines
of accountability and delegation of authority;
• Group employees are required to adhere to specified codes
of conduct, policies and procedures;
• financial results and key operational and financial performance
indicators are reported regularly throughout the year and variances
from plans and budgets are investigated and reported;
• financial control protocols are in place to safeguard the assets
•
and maintain proper accounting records; and
risk management is monitored on an ongoing basis to identify,
quantify and manage risks facing the Group.
Shareholder relations
Venture Life aims to ensure a timely, open, comprehensive and
consistent flow of information to investors and the financial community
as a whole. By this approach we aim to help investors understand the
Group’s strategic objectives, its activities and the progress it makes.
Shareholders are welcome to attend the Group’s Annual General
Meeting (“AGM”), where they have the opportunity to meet the Board.
All shareholders will have at least 21 days’ notice of the AGM at which
the Directors will be available to discuss aspects of the Group’s
performance and answer questions from shareholders. The Company
also meets with its institutional shareholders and analysts as appropriate
and uses the AGM to further encourage communication with
shareholders. In addition, the Company uses the Annual Report and
Accounts, Interim Statement and website to disseminate information
to shareholders.
The 2021 AGM will be held on 20 May 2021 and a Notice of Annual
General Meeting can be found enclosed with this report.
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Attendance at Board meetings and Committees
The Directors attended the following Board meetings and Committee meetings during the year.
Due to the COVID-19 the majority of these meetings were held remotely:
Director Board Audit Remuneration
Dr Lynn Drummond 5/5 2/2 2/2
Peter Bream 5/5 2/2 2/2
Jerry Randall 5/5 - -
Sharon Daly (née Collins) 5/5 - -
Carl Dempsey 5/5 2/2 2/2
Gianluca Braguti 5/5 - -
Andrew Waters 5/5 2/2 2/2
Total meetings held in the year 5 2 2
Under the Articles of Association, all Directors must offer themselves for re-election at least once every three years. One-third of the Directors shall
retire by rotation at every Annual General Meeting. All Directors who retire by rotation are eligible for re-appointment.
Dr Lynn Drummond
Non-Executive Chair
24 March 2021
Venture Life Group plc Annual Report & Accounts 2020
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Corporate Governance
Directors’ Report
Specifically in Italy, the company introduced three main activities:
a) Introduction of stringent procedures to protect staff including the
provision of masks and handwashes, the physical separation of
employees and restrictions to meeting sizes, the control of attendees
and visitors to the premises and other measures, including regular
staff testing and extensive deep cleaning of the facilities. The
administrative workforce continues to work partly from home and
partly onsite, subject to social distancing, and the on-site production
workforce has been broken into smaller operating teams;
b) Procurement of critical raw materials to not only meet customer
demand for existing production but to enable additional manufacture
of handwashes and anti-microbial products;
c) Strategic prioritisation of customer orders to ensure that the existing
inventory of finished goods (and work-in-progress as it becomes
completed) is allocated appropriately to those parties based upon
need, continuity of supply and other factors in order to ensure the
demand is met.
Specifically in the UK and The Netherlands the administrative workforce
continues to work partly from home and partly onsite, subject to social
distancing and regular cleaning and sanitising activities.
As a direct result of these measures, at 24 March 2021 the Italian factory
has remained open throughout the pandemic and is producing high
volumes of product. Shipments of finished goods to customers are
continuing as are invoicing and cash collection processes. The majority
of Venture Life Group’s customers are large organisations and it is the
opinion of the Directors that bad debts will remain a relatively low risk.
The UK and Netherlands functions have remained fully functional from
a new operating norm, comprising a blend of office attendance and
remote working.
In spite of the very positive situation of maintaining all business
functions throughout 2020 and into 2021, the Directors have as a
prudent exercise evaluated a range of scenarios all depicting varying
months of closure of the Italian factory and associated losses of
marginal gross profits. The key findings of this evaluation are:
a) Management does not expect the Italian factory to close, but
acknowledges that there is a clear risk that it could face the need to
close for a period of up to one month. The impact of this one-month
closure would be minor in terms of 2021/2022 performance and
closing cash at 30 June 2022 is forecast to be in excess of £20.0
million. Given the strong inventory that the company holds, there is
an expectation that such a short closure would in practice be
managed with £nil impact on 2021 and 2022 performance;
b) A scenario with a more extensive closure to the factory of 3 months
yields a significantly reduced PBT for 2021 improving in 2022 and a
positive cash balance on 30 June 2022 in excess of £20.0 million; and
c) A dramatically more pessimistic scenario with an extensive closure
to the factory of 6 months yields a significantly reduced PBT for 2021
improving into 2022 and a positive cash balance on 30 June 2022
in excess of £20.0 million. The Directors consider this scenario
as extremely unlikely in practice.
General matters
The Directors submit their report and the financial statements of
Venture Life Group plc for the year ended 31 December 2020. Venture
Life Group plc is a public limited company quoted on AIM, incorporated
and domiciled in the United Kingdom with registered office at Venture
House, 2 Arlington Square, Bracknell, Berkshire. RG12 1WA.
It has subsidiary companies in the United Kingdom, Italy,
The Netherlands and Switzerland and a branch located in Italy.
Results
The profit before tax for the year ended 31 December 2020 was
£3.3 million (2019: £1.4 million). The detailed results for the year and the
financial position at 31 December 2020 are shown in the Consolidated
Statement of Comprehensive Income on page 48 and the Consolidated
Statement of Financial Position on page 49. The Directors do not
recommend the payment of a dividend.
Principal activities
The principal activities of Venture Life Group plc and its subsidiaries
are the development and commercialisation of healthcare products,
including oral care products, food supplements, medical devices and
dermo-cosmetics for the ageing population; the development and
commercialisation of cosmetic products; and the manufacturing of
a range of topical products for the healthcare and cosmetic sectors.
Business review and future developments
There are a number of items required to be included in the Directors’
Report, which are covered elsewhere in this report. The following are
covered in the Strategic Report:
• Financial risk and management objectives and policies
• Business outlook
Going concern
The Group made a profit after tax during the year of £2.4 million and
generated in excess of £2.0 million in operating cash flow, all arising
from transactions of an ongoing nature and in the ordinary course of
business. The order book at 31 December 2020 remains strong.
The Company had net cash of £35.5 million at the year-end excluding
finance leases, and £30.9 million including finance leases. Business
operations are cash generative and significantly exceed investing and
financing outflows.
The Directors have prepared detailed financial forecasts and cash flows
looking beyond 12 months from the date of these financial statements,
and have made assumptions based upon their view of the current and
future economic conditions that will prevail over the forecast period.
On the basis of the above projections, the Directors believe that the
Group is well placed to manage its business risks successfully.
As described in Note 3, the company has been managing the impact
of the COVID-19 pandemic on its business for much of 2020 and on
a continuing basis into 2021. The uncertainty that this might bring has
the potential in the worse-case scenario to create a significant shortfall
versus the 2021 budgeted trading results and cashflows. The company
manufactures a high proportion of its products in its own facility
in Lombardy, Italy which had been an epicentre of this pandemic
outbreak during 2020. In spite of this risk, the company executed a
number of precautionary and protective actions to protect the health
and wellbeing of the staff whilst maintaining business operations.
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All of these above scenarios are assisted from the outset by the Group’s
strong £35.5 million net cash position at 31 December 2020 which in
itself gives a strong level of assurance of the ability of the Group to
remain as a Going Concern.
Directors
The following Directors held office during the year and up to the date of
this report:
Based upon these financial forecasts, the Directors believe that:
a) The procedures in place in Italy have been effective to date and the
company has established a pattern of operating through periods of
lockdown to ensure continuity of business, as well as attainment of
local authority acclaim; and
b) The procedures in place in the UK and Netherlands have been
effective to date and the company has established a pattern
of operating through periods of lockdown to ensure continuity
of business, and
c) The business has sufficient balance sheet strength to weather
even an unrealistically long stoppage and remain liquid.
Accordingly, after making enquiries the Directors foresee that even in the
most extreme scenario of a six month factory closure (which is far beyond
any contemplated worse-case scenario) the Group has sufficient
resources to continue in operational existence for the foreseeable future
and to comfortably make scheduled loan repayments as they fall due.
The Directors therefore conclude that the Going Concern basis remains
the appropriate basis upon which to prepare the Group’s financial
statements.
New product development
Details of the Group’s new product development programmes can
be found on page 17. The accounting treatment in respect of costs
incurred in carrying out the new product development programmes
can be found in Note 3.8 to the financial statements and the costs of
new product development that have been expensed in the year are
shown in Note 7 under the caption “research and development
costs included in operating expenses”.
Name Title
Dr Lynn Drummond Non-Executive Chair
Jerry Randall Chief Executive Officer
Sharon Daly (née Collins) Chief Commercial Officer
Gianluca Braguti Chief Manufacturing Officer
Carl Dempsey Non-Executive Director
Peter Bream Non-Executive Director
Andrew Waters Chief Financial Officer
Information on Directors’ remuneration, share options, long-term
executive plans, pension contributions and benefits is set out in the
Remuneration Report on pages 36 to 40.
Qualifying third-party indemnity provision is in place for the benefit
of each of the Directors of the Company.
External directorships
It is the Group’s policy that its Directors may take up other directorships
provided that such appointments do not conflict with their employment
with the Group. Individuals may retain any remuneration received from
such services. External directorships held by the Directors who are in
office as at the date of this report are detailed below:
Jerry Randall is a Director of Avantis UK Limited.
Gianluca Braguti is a Director of Immobiliare Cremasca di Parati Lucia e
C. S.a.s. (“socio accomandante”), Farmacia S. Francesco dei dott.
Braguti A. – L.G. S.n.c. (“socio amministratore”), Biogenico Worldwide S.r.l,
Biokosmes Immobiliare S.r.l, and Grafco2 S.r.l.
Andrew Waters is a Director of Cubase Consulting Ltd and ACP1 Ltd.
Political donations
The Group made no political donations in the year under review
(2019: £nil).
Peter Bream is a Director of Abramis Limited.
Carl Dempsey is a Director of Big Blue Bear Limited.
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Corporate Governance
Directors’ Report
continued
Directors’ share interests
The Directors in office at 31 December 2020 and their interests in the shares of the Company were as follows:
Number of Number of
ordinary 0.3p ordinary 0.3p
shares held at shares held at
31 December % of issued 31 December % of issued
Director Title 2020 share capital 2019 share capital
Jerry Randall1 Chief Executive Officer 1,884,865 1.5% 3,931,129 4.7%
Gianluca Braguti1 Chief Manufacturing Director 3,542,730 2.8% 7,085,459 8.1%
Sharon Daly (née Collins) Chief Commercial Director 1,009,977 0.8% 1,665,333 2.0%
Andrew Waters Chief Financial Officer - - - -
Lynn Drummond Non-Executive Chair 18,365 0.01% 18,365 0.02%
Carl Dempsey Non-Executive Director 20,000 0.01% 20,000 0.02%
Peter Bream Non-Executive Director 25,000 0.02% 25,000 0.03%
1 Includes indirect holdings.
Share capital
As at 31 December 2020, the authorised and issued share capital of the Company was:
Number of ordinary Amount
0.3p shares £
Issued and fully paid up 125,831,530 377,495
The average market price of the Company’s ordinary shares at close of business on 31 December 2020 was 93.00 pence. The maximum share price
during the period was 115.00 pence and the minimum price was 22.50 pence per share.
Substantial share interests
At 24 March 2021, the Company had been advised or is aware of the following interests, held directly or indirectly, of 3% or more in the Company’s
issued share capital:
Number %
of shares holding
Slater Investments 19,121,431 15.20%
Blackrock 10,287,191 8.18%
BGF Investment Management Limited 9,581,824 7.61%
Hargreaves Lansdown 7,470,972 5.94%
River & Mercantile Asset Management LLP 6,437,200 5.12%
J O Hambro Capital Management Limited 5,555,000 4.41%
Close Brothers Asset Management 5,538,410 4.40%
Stonehage Fleming 5,093,438 4.05%
Chelverton Asset Management 3,778,000 3.00%
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Employees
The Group is committed to providing equal opportunities in
employment. All job applicants and employees receive equal treatment
regardless of sex, race, colour, age, nationality, physical disability or
ethnic origin. The Board is extremely mindful of, and regularly discusses,
human rights and reviews the potential issues which may arise from time
to time to ensure that appropriate investments or changes in operating
practices are made to address these impacts. The Group has an anti-
bribery and anti-corruption framework in place to not tolerate any form
of bribery or inducements for any purpose nor the acceptance or giving
of gifts or hospitality from or to any other party that has, could have or
might be perceived to have a business relationship or potential business
relationship with the Group unless the value of the gift or hospitality is
clearly insignificant.
The motivation of staff and the maintenance of an environment where
innovation and team working is encouraged are seen as key objectives
by the Board and all employees are given the opportunity to participate
in the Company’s share option scheme. We promote internal
communication of the Group’s progress by means of regular meetings
held with staff where issues are discussed in an open manner.
The Board also recognises that a safe, secure and healthy working
environment contributes to productivity and improved performance.
Relationships with suppliers, customers and others
The Board recognises that the growth in performance of the Group
is dependent not only on the recruitment, development and motivation
of its employees but also upon strong and congruent relationships with
its customers, suppliers and other stakeholders. These relationships are
fostered through the discipline of maintaining regular communication
across a variety of media and by creating an internal employee culture
of rapid and professional responsiveness and flexibility to the needs and
enquiries presented to the Group by these parties. The effects of this
during 2020 have been a significant factor in keeping the Group’s
business operations fully functional during some months of high
uncertainty arising during periods of national lockdown. The strengths
of the Group’s supplier relationships have enabled raw materials supply
to be maintained in full despite many challenges across the industrial
supply chain.
Environment
The Group is conscious of its responsibilities in respect of the
environment and follows a Group-wide environmental policy.
The Group disposes of its waste products through regulated
channels using reputable agents.
Principal risks and uncertainties
A summary of the principal risks and uncertainties and financial risk
management objectives and policies are set out on pages 20 and 21.
Statement as to disclosure of information to the auditor
The Directors who were in office on the date of approval of these
financial statements have confirmed that, as far as they are aware, there
is no relevant audit information of which the auditor is unaware. Each of
the Directors have confirmed that they have taken all the steps that they
ought to have taken as Directors in order to make themselves aware of
any relevant audit information and to establish that it has been
communicated to the auditor.
Auditor
Grant Thornton UK LLP has expressed its willingness to continue in
office. In accordance with Section 489(4) of the Companies Act 2006,
a resolution to re-appoint Grant Thornton UK LLP as auditor will be
proposed at the forthcoming AGM.
2021 Annual General Meeting
The 2021 AGM will be held on 20 May 2021 the business of which is set
out in the Notice of Annual General Meeting enclosed with this report.
On behalf of the Board,
Jerry Randall
Director
24 March 2021
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Corporate Governance
Remuneration Report
Remuneration Committee
As a company listed on the Alternative Investment Market (AIM),
the Company is not required to comply with Schedule 8 of the Large
and Medium-sized Companies and Group (Accounts and Reports)
Regulations 2008 as amended in August 2013 (the “Regulations”),
nor is it required to comply with the principles relating to Directors’
remuneration in the UK Corporate Governance Code 2016
(the “Code”). This report has not been audited.
Remuneration policy
The Group’s remuneration policy is designed to ensure that the
remuneration packages attract, motivate and retain Directors and senior
managers of high calibre and to reward them for enhancing value to
shareholders. The Company’s policy is that a substantial proportion of
the total potential remuneration of the Executive Directors should be
performance-related and aligned to performance measures that benefit
all shareholders and promote the long-term success of the Company.
The Company’s Remuneration Committee consists of the Chair and the
other two Non-Executive Directors. The Chief Financial Officer is invited
to attend meetings of the Committee but no Director is involved in any
decisions relating to their own remuneration.
The performance measurement of the Executive Directors and the
determination of their annual remuneration package, including
performance targets, are undertaken by the Remuneration Committee.
None of the Committee has any personal financial interest (other than
as shareholders), conflicts of interests arising from cross directorships,
or day-to-day involvement in running the business.
The Committee is responsible for the consideration and approval of
the terms of service, remuneration, bonuses, share options and other
benefits of the other Directors. All decisions made are after giving due
consideration to the size and nature of the business and the importance
of retaining and motivating management. The Committee will meet at
least once a year and at other times as appropriate.
The Committee keeps itself informed of all relevant developments and
best practice in the field of remuneration and seeks advice from external
advisers when it considers it is appropriate. New Bridge Street were
engaged during the financial year to provide independent advice to the
Executive Directors in respect of the new Long-Term Incentive Plan.
There are four main elements of the remuneration package
for Executive Directors and other senior management:
• basic annual salary and benefits;
• annual bonus payments;
•
long-term incentives; and
• pension arrangements.
The remuneration of the Non-Executive Directors comprises
only of Directors’ fees.
Salary
Basic salaries are reviewed annually and if revised, the change
in salary takes effect from the start of the financial year.
Annual bonuses
The Board believes that bonuses are an important incentive for
Executives to achieve the Group’s objectives, and as such should
represent a significant element of the total compensation awards
for the Executives.
All the Executive Directors currently participate in the same bonus
scheme and achievement of bonuses is aligned to the achievement
of the Group’s financial targets. The bonus scheme enables Executives
to earn a bonus of up to 100% of salary for achieving stretching financial
targets and, where appropriate, stretching operational targets, which
have been set at a level perceived appropriate to provide the necessary
incentives. In the event of over-or under-achievement of the Group
financial performance against those targets, appropriate adjustments
may be made to the bonus payable.
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Long-Term Incentive Plan
Prior to 2016, the Company used market value share options as its primary Senior Executive incentive arrangement to motivate and retain selected
Senior Executives within the Group. Under that arrangement the Directors were granted the following share options:
Options Options
Share option Options as at granted exercised Options as at Date from
scheme 31 December during during 31 December which first Exercise Performance
2019 the year the year 2020 exercisable Expiry date price conditions
Jerry Randall EMI 705,700 - 705,700 - 31 Dec 2012 31 Aug 2022 45p Non-market
Jerry Randall EMI 162,187 - 162,187 - 1 Jul 2014 4 Nov 2023 41p Non-market
Jerry Randall Unapproved 483,333 - - 483,333 1 Jul 2014 4 Nov 2023 41p Non-market
Jerry Randall Unapproved - 1,000,000 - 1,000,000 31 Mar 2022 31 Mar 2029 33.7p Non-market
Sharon Daly
(née Collins) EMI 705,700 - 705,700 - 31 Dec 2012 31 Aug 2022 45p Non-market
Sharon Daly
(née Collins) EMI 162,187 - 162,187 - 1 Jul 2014 4 Nov 2023 41p Non-market
Sharon Daly
(née Collins) Unapproved 483,333 - - 483,333 1 Jul 2014 4 Nov 2023 41p Non-market
Sharon Daly
(nee Collins) Unapproved - 1,000,000 - 1,000,000 31 Mar 2022 31 Mar 2029 33.7p Non-market
Gianluca Braguti Unapproved - 1,000,000 - 1,000,000 31 Mar 2022 31 Mar 2029 33.7p Non-market
Andrew Waters Unapproved - 1,000,000 - 1,000,000 31 Mar 2022 31 Mar 2029 33.7p Non-market
Two of the Directors exercised a total of 1,735,774 options in total during the year.
Since 2016, further awards have been made under the Company’s Long-Term Incentive Plan (“LTIP” or the “Plan”) as its primary Senior Executive
incentive arrangement to replace market value share options. The key terms of the LTIP are as follows:
• awards will normally be granted annually and will vest after three years;
• awards will normally be structured as nil cost options or conditional awards;
• awards will normally be granted annually immediately following the release of the Group’s financial results each year;
•
• awards will only normally vest subject to continued service and to the extent that relevant performance targets are met; and
• performance targets will normally be based on earnings per share and/or total shareholder return targets.
the maximum annual value of nominal cost options that can be made to an individual is equivalent to 200% of basic salary at the date of grant;
The Remuneration Committee administers the LTIP and the grant of nominal cost options under the LTIP.
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Corporate Governance
Remuneration Report
continued
Long-Term Incentive Plan continued
No awards were made during 2020. A summary of the awards made in previous years that have not yet lapsed are set out below:
Award Four
(date of grant:
Name 23 March 2018)
Jerry Randall 224,274
Gianluca Braguti 180,325
Sharon Daly (née Collins) 149,516
554,115
A full summary of the performance conditions attached to outstanding awards can be found in Note 24. To the extent that these performance
conditions are not met at the end of the vesting period, the options will lapse.
Pensions
The Group contributes to the personal pension plans of certain Executive Directors and employees. Under the scheme, the Group will make
direct contributions. The Group recently reached its “auto-enrolment staging date” and is complying with its auto-enrolment obligations in respect
of eligible employees.
Directors’ letters of appointment and contracts
All Executive Directors have rolling service contracts with six months’ notice. The Non-Executive Directors do not have service contracts but have
letters of appointment.
Executive Directors Date of contract Notice period
Jerry Randall 12 December 2013 Six months’ notice to be given by the Executive Director and 30 days’ by the
Sharon Daly (née Collins) 12 December 2013 Company. In the event that the Company terminates the Executive’s
Gianluca Braguti 19 March 2019 employment without cause, then an amount equal to 50% of the employee’s
Andrew Waters 1 May 2019 salary is payable by the Company.
Executive Directors Date of contract Notice period
Lynn Drummond 22 November 2013 Three months
Peter Bream 13 February 2016 Three months
Carl Dempsey 20 September 2018 Three months
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Directors’ remuneration 2020
Social
Pension security
Salary/fees Bonus Benefits Total contributions contributions Total
£ £ £ £ £ £ £
Executive Directors
Jerry Randall 278,903 100,000 3,406 382,309 7,000 51,081 440,390
Sharon Daly 191,096 100,000 2,268 293,364 15,737 38,964 348,065
Andrew Waters 147,755 50,000 2,267 200,022 22,163 26,052 248,237
Gianluca Braguti 222,420 100,000 - 322,420 44,484 46,042 412,946
Non-Executive Directors
Lynn Drummond 55,000 - - 55,000 - 6,383 61,383
Peter Bream 27,000 - - 27,000 - 2,519 29,519
Carl Dempsey 27,000 - - 27,000 - 2,519 29,519
Total 949,174 350,000 7,941 1,307,115 89,385 173,559 1,570,059
1 Gianluca Braguti’s salary and fees equate to €250,000 in respect of his role as Managing Director of Biokosmes and €10,000 in respect of his role as a Director of Venture Life Group plc
(2019: €250,000 and €10,000 respectively), translated at average exchange rate over the period.
The Executive Directors listed above at the reporting date are considered to be the key management of the Group.
Directors’ remuneration 2019
Social
Pension security
Salary/fees Bonus Benefits Total contributions contributions Total
£ £ £ £ £ £ £
Executive Directors
Jerry Randall 270,572 20,000 2,749 293,321 10,000 38,915 342,236
Sharon Daly (née Collins) 176,501 20,000 1,319 197,820 26,475 25,933 250,228
Adrian Crockett2 82,817 - 122 82,939 1,812 11,332 96,084
Gianluca Braguti1 214,737 20,000 - 234,737 42,947 20,526 298,210
Andrew Waters3 96,667 - 980 97,647 14,500 12,546 124,693
Non-Executive Directors
Lynn Drummond 55,000 - - 55,000 - 6,405 61,406
Peter Bream 27,000 - - 27,000 - 2,542 29,542
Carl Dempsey 27,000 - - 27,000 - 2,542 29,542
Total 950,294 60,000 5,170 1,015,464 95,735 120,742 1,231,940
1 Gianluca Braguti’s salary and fees equate to €250,000 in respect of his role as Managing Director of Biokosmes and €10,000 in respect of his role as a Director of Venture Life Group plc
(2018: €250,000 and €10,000 respectively), translated at average exchange rate over the period.
2 Resigned 29 January 2019.
3 Appointed 1 May 2019.
The Executive Directors listed above at the reporting date are considered to be the key management of the Group.
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Corporate Governance
Remuneration Report
continued
Share options
The Company currently issues share options to staff to reward
performance, to encourage loyalty and to enable valued employees
to share in the success of the Company.
In setting up the share option schemes, the Remuneration Committee
took into account the recommendations of shareholder bodies on the
number of options to issue, the criteria for vesting and the desirability
of granting share options to Executive and Non-Executive Directors.
All employees are generally eligible to receive share options under
the Company’s EMI or unapproved share option schemes after three
months’ service. Option awards for employees are recommended by
the Executive Directors and approved by the Remuneration Committee.
Other benefits
Some benefits, such as private medical insurance, are available to all
Executive Directors and certain other employees. Death in service
benefit is provided to all Executive Directors and employees.
Non-Executive Directors
The Non-Executive Directors have entered into letters of engagement
with the Company, with the Board determining the fees paid to the
Non-Executive Directors. Non-Executive Directors do not participate
in the Group’s pension or bonus schemes in their capacity as
Non-Executive Directors.
The appointments can be terminated upon three months’ notice being
given by either party.
On behalf of the Board,
Carl Dempsey
Chairman of the Remuneration Committee
24 March 2021
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Corporate Governance
Statement of Directors’ Responsibilities
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s transactions
and disclose with reasonable accuracy at any time the financial position
of the Group and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Group and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Venture Life Group
plc website (www.venture-life.com).
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
The Directors are responsible for preparing the Strategic Report,
the Directors’ Report and the Financial Statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law, the Directors have elected to
prepare the Group financial statements on a going concern basis
under the historical cost convention and in accordance with
International Accounting Standards (“IASs”) in conformity with the
requirements of the Companies Act 2006, the International Financial
Reporting Interpretations Committee (“IFRIC”), interpretations issued by
the International Accounting Standards Boards (“IASB”) that are effective
or issued and adopted as at the time of preparing these financial
statements, and in accordance with the provisions of the Companies
Act 2006 that are relevant to companies that report under IFRSs.
Under company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair view
of the state of affairs and profit or loss of the Group for that period.
In preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable IFRS have been followed with respect to the
Group financial statements and whether applicable UK accounting
standards have been followed with respect to the Company financial
statements; and
• prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Group will continue in business.
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Financial Statements
Independent Auditor’s Report
to the members of Venture Life Group plc
Opinion
Our opinion on the financial statements is unmodified
Our opinion on the financial statements is unmodified
We have audited the financial statements of Venture Life Group plc (the ‘parent company’) and its subsidiaries (the ‘Group’) for the year ended 31 December 2020, which
We have audited the financial statements of Venture Life Group plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 31 December 2020, which
comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity,
comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity, the
the Consolidated Statement of Cash Flows, the Parent Company Balance Sheet, the Parent Company Statement of Changes in Equity and notes to the financial
Consolidated Statement of Cash Flows, the Parent Company Balance Sheet, the Parent Company Statement of Changes in Equity and notes to the financial statements,
statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in the preparation of the Group financial
including a summary of significant accounting policies. The financial reporting framework that has been applied in the preparation of the group financial statements is
statements is applicable law and international accounting standards in conformity with the requirements of the Companies Act 2006. The financial reporting framework
applicable law and International Accounting Standards in conformity with the requirements of the Companies Act 2006. The financial reporting framework that has been
that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including Financial
applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard
Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).
102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
•
In our opinion:
the financial statements give a true and fair view of the state of the Group’s and of the parent company’s affairs as at 31 December 2020 and of the Group’s
•
the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 December 2020 and of the group’s profit for the
profit for the year then ended;
year then ended;
the Group financial statements have been properly prepared in accordance with international accounting standards in conformity with the requirements
•
the group financial statements have been properly prepared in accordance with International Accounting Standards in conformity with the requirements of the
of the Companies Act 2006;
Companies Act 2006;
the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
•
the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
•
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
•
•
•
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are
further described in the ‘Auditor’s responsibilities for the audit of the financial statements’ section of our report. We are independent of the Group and the parent company
in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We are responsible for concluding on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the parent company’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or,
if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report.
However, future events or conditions may cause the Group or the parent company to cease to continue as a going concern.
A description of our evaluation of management’s assessment of the ability to continue to adopt the going concern basis of accounting, and our results arising
with respect to that evaluation is included in the key audit matters section of our report.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast
significant doubt on the Group’s and the parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial
statements are authorised for issue.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements
is appropriate.
The responsibilities of the Directors with respect to going concern are described in the ‘Responsibilities of directors for the financial statements’ section of this report.
Our approach to the audit
Overview of our audit approach
Overall materiality:
• Group: £400,000, which represents approximately 1.3% of the Group’s revenue for the year.
• Parent company: £60,000, which was determined based on benchmarks including revenue and total assets,
Materiality
and is approximately 0.1% of the parent company’s total assets at the year end.
Key audit matters were identified as:
• Revenue recognition (consistent with the previous year)
• Going concern assumption (new)
• Valuation of goodwill and other indefinite-lived intangible assets (consistent with the previous year)
• Recoverability of investments (consistent with the previous year, parent company only)
Audit scope
Our auditor’s report for the year ended 31 December 2019 included one key audit matter for the Group and one key
audit matter for the parent company that have not been reported as key audit matters in our current year’s report.
For the Group, this relates to ‘impairment of goodwill and other intangible assets’ where this now only relates to goodwill
and other indefinite life intangible assets due to no impairment indicators being identified over definite life intangible assets.
Key audit
matter
For the parent company, this relates to ‘recoverability of investments and intercompany balances’ where the recoverability
of intercompany balances is no longer included within the recoverability of investments key audit matter due to the increase
in profitability and performance of those entities.
We performed a full scope audit of the financial statements of the parent company, Venture Life Group plc and of the financial
information of Venture Life Limited, Periproducts Limited, Lubatti Limited and Biokosmes S.r.l. The Biokosmes S.r.l entity was
audited by component auditors. We performed specified audit procedures on Nelie BV and PharmaSource BV, and performed
analytical procedures on the financial statements of PermaPharm AG and MD Manufacturing BV. The components of Nelie BV,
PharmaSource BV and MD Manufacturing BV were newly acquired during the year.
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Description
Audit response
KAM
Disclosures
Our results
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included those that had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
In the graph below, we have presented the key audit matters, significant risks and other risks relevant to the audit.
High
Potential financial
statement impact
Revenue
recognition
Going concern
assumption
Valuation of goodwill
and other indefinite
life intangible assets
Recoverability
of investments
Employee
remuneration
Trade payables
Trade payables
Trade receivables
Management override
of controls
Inventory
Share based
payments
Low
Low
Extent of management judgement
High
Key audit matter
Significant risk
Other risk
Key Audit Matter – Group
How our scope addressed the matter – Group
Revenue recognition
We identified revenue recognition as one of the most significant assessed
risks of material misstatement due to fraud.
Under ISA (UK) 240 ‘The Auditor’s Responsibilities Relating to Fraud in an Audit
of Financial Statements’, there is a presumed risk that there are risks of fraud in
recognition of revenue.
Revenue of £30.1m has been recognised in the year arising substantially from
the sale of products.
There is a risk of fraudulent revenue recognition without entitlement to that
revenue under International Financial Reporting Standard (IFRS) 15 ‘Revenue
from Contracts with Customers’.
We have determined that, due to pressure to meet market expectations being
heightened towards the end of the year, this risk is therefore significant in respect
of revenue recognised in the last three months of the year.
In responding to the key audit matter, we performed the following audit procedures:
• assessing the Group’s revenue recognition policy against the financial reporting
framework, including IFRS 15, and checking management’s assessment of IFRS
15 by comparing to underlying contracts;
• analysing revenue postings throughout the year using our data interrogation
and analysis software to identify transactions lying outside our expectations
and then agreed these outliers to supporting documentation;
• evaluating the design and implementation of relevant key controls over revenue;
•
and
testing the occurrence of revenue by selecting samples of individual revenue
items during the year, with a higher proportion of samples during the last three
months of the year, and agreeing items selected for testing through evidence
of delivery and payment for proof of performance obligations being met.
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Relevant disclosures in the Annual Report and Accounts 2020
• Financial statements: Note 5, Segmental information
Our results
Based on the results of our audit testing, we did not identify any materially incorrect
revenue recognition from revenue recognised in the last three months of the year.
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Financial Statements
Independent Auditor’s Report
to the members of Venture Life Group plc
Key Audit Matter – Group
How our scope addressed the matter – Group
Going concern assumption
We identified the going concern assumption as one of the most significant
assessed risks of material misstatement due to error.
Due to the ongoing COVID-19 pandemic, the Group may not be able to continue
as a going concern. The existence of the pandemic creates significant estimation
uncertainty when forecasting and therefore errors may occur.
The directors have concluded, based on the various scenarios developed and the
sufficient cash resources held at the Statement of Financial Position date, that the
Group has sufficient resources available to meet its liabilities as they fall due and
have concluded that there are no material uncertainties around the going
concern assumptions.
In responding to the key audit matter, we performed the following audit procedures:
• considering the inherent risks associated with the Group’s business model
•
including effects arising from macro-economic uncertainties such as Brexit
and COVID-19;
testing the accuracy of management’s forecasting through a comparison
of budget to actual data and historical variance trends and reviewing the
cash flows for exceptional or unusual items or assumptions;
• challenging management’s assumptions and estimates made in preparing
models, including considering expected net cash balances in numerous
models;
• considering management’s proposed mitigating actions that they could
implement should the COVID-19 pandemic recovery not be in line with
management’s forecasts;
• assessing sensitivities applied by management to stress test the Group’s
position, primarily in relation to the impact of a scenario where the
manufacturing facility in Italy closed for a set period of time; and
• evaluating the Group’s disclosures on going concern for compliance
with the requirements of IAS 1 ‘Presentation of financial statements’.
Relevant disclosures in the Annual Report and Accounts 2020
• Financial statements: Note 3.1, Going concern
• Financial statements: Note 3.22(b), Critical accounting judgements
Our results
We have nothing to report in addition to that stated in the “Conclusions relating
to going concern” section of our report.
and estimates
• Directors’ report: Going concern
Valuation of goodwill and other indefinite-lived intangible assets
We identified valuation of goodwill and other indefinite life intangible assets as
one of the most significant assessed risks of material misstatement due to error.
For goodwill and other indefinite life intangible assets, the Directors are required
to perform an annual impairment review.
The Directors are also required to assess impairment indicators to determine
whether the Group’s other intangible assets might be impaired. Where such
indicators exist, the Directors are required to perform an impairment review.
The process for assessing whether impairment exists under IAS 36 “Impairment
of Assets” is complex. The process of determining the value in use, through
forecasting cash flows related to cash generating units (CGUs) and the
determination of the appropriate discount rate and other assumptions to be
applied can be highly judgemental and can significantly impact the results of
the impairment review.
Relevant disclosures in the Annual Report and Accounts 2020
• Financial statements: Note 15, Intangible Assets
In responding to the key audit matter, we performed the following audit procedures:
• assessing the reasonableness of the assumptions used by management in
identifying the CGUs;
• obtaining management’s assessment of intangible assets impairment and
•
recalculating the arithmetical accuracy of those calculations;
testing the assumptions utilised in the impairment models used by
management including growth rates, discount rates, the forecast period,
terminal values and corroborating to supporting market data and historic trends;
• completing sensitivity analysis on the impairment models used by
management, focussing on reasonably possible movements in key
assumptions, including revenue and discount rates;
• comparing current market capitalisation to carrying value of net assets and
•
management’s calculated value in use for the Group; and
testing the accuracy of management’s forecasting through a comparison of
budget to actual data and historical variance trends and reviewing the cash
flows for exceptional or unusual items or assumptions.
Our results
Based upon the results of our audit testing, we found that the assumptions used
by management in arriving at the value in use of goodwill and other indefinite life
intangible assets were balanced. We agreed with management’s assessment that
there are no indicators of impairment on other intangible assets with definite lives.
Key Audit Matter – Parent company
How our scope addressed the matter– Parent company
Recoverability of investments
We identified recoverability of investments as one of the most significant
assessed risks of material misstatement due to error.
Investment balances at the year-end stand at £25.1m. The directors make an
annual assessment to determine whether there are indicators that the balances
may be impaired.
Where indicators of impairment are identified, in order to determine if these
balances are impaired, management prepare discounted cash flow forecasts.
Assumptions to be applied can be highly judgemental and can significantly
impact the results of the impairment review.
Relevant disclosures in the Annual Report and Accounts 2020
• Parent Company Financial statements: Note 5, Investments
In responding to the key audit matter, we performed the following audit procedures:
• obtaining management’s assessment, recalculating the arithmetical accuracy of
those calculations and testing the assumptions utilised, including growth rates,
discount rates and terminal values by corroborating to supporting market data;
testing the accuracy of management’s forecasting through a comparison of
budget to actual data and historical variance trends and reviewing the cash
flows for exceptional or unusual items or assumptions; and
•
• completing sensitivity analysis on the impairment models used by
management, focusing on reasonably possible movements in key assumptions,
including future profitability and discount rates.
Our results
Based upon the results of our audit testing, we found that the assumptions used
by management in arriving at the recoverable amounts were balanced. We found
no mathematical errors in the calculations. Our sensitivity analysis indicated that
management’s impairment assessment was not highly sensitive to reasonably
possible changes in assumptions.
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Our application of materiality
We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified misstatements on the audit and of uncorrected
misstatements, if any, on the financial statements and in forming the opinion in the auditor’s report.
Materiality was determined as follows:
Materiality measure
Group
Parent company
Materiality for financial
statements as a whole
Materiality threshold
We define materiality as the magnitude of misstatement in the financial statements that, individually or in the
aggregate, could reasonably be expected to influence the economic decisions of the users of these financial
statements. We use materiality in determining the nature, timing and extent of our audit work.
£400,000, which is approximately 1.3% of the Group’s
revenue for the year.
£60,000, which was determined based on benchmarks
including revenue and total assets, and is approximately
0.1% of the parent company’s total assets at the year end.
Significant judgements made by auditor in
determining the materiality
In determining materiality, we made the following
significant judgements:
• Revenue is considered to be the most appropriate
benchmark because there is considerable volatility
in profit before tax, along with revenue being a key
performance metric for the Group.
Materiality for the current year is higher than the level
that we determined for the year ended 31 December
2019 to reflect the increased revenue generated.
In determining materiality, we made the following
significant judgements:
• During the financial year a branch of the parent
company began trading. This changed the nature
of the parent company from a holding company
to a trading entity.
• Due to this, our materiality benchmark considered
both balance sheet benchmarks and profit or loss
benchmarks in determining our materiality.
Materiality for the current year is lower than the level that
we determined for the year ended 31 December 2019
to reflect the fact that the parent company now has
a trading branch impacting its results.
Performance materiality used to drive the
extent of our testing
We set performance materiality at an amount less than materiality for the financial statements as a whole
to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality for the financial statements as a whole.
Performance materiality threshold
£300,000, which is 75% of financial statement materiality.
£45,000, which is 75% of financial statement materiality.
Significant judgements made by auditor in
determining the performance materiality
In determining materiality, we made the following
significant judgements:
• Our risk assessment – based on the results of our
risk assessment procedures, we considered the
Group’s overall control environment to be effective.
• Our experience with auditing the financial statement
In determining materiality, we made the following
significant judgements:
• Our risk assessment – based on the results of our risk
assessment procedures, we considered the Group’s
overall control environment to be effective.
• Our experience with auditing the financial statement
of the Group in previous years – based on the
identification of few misstatements and management’s
positive attitude to correcting misstatements identified.
of the parent company in previous years – based on the
identification of few misstatements and management’s
positive attitude to correcting misstatements identified.
• The number of components within the Group and the
extent of audit procedures planned and performed in
respect of these components.
Specific materiality
We determine specific materiality for one or more particular classes of transactions, account balances or disclosures
for which misstatements of lesser amounts than materiality for the financial statements as a whole could reasonably
be expected to influence the economic decisions of users taken on the basis of the financial statements.
Specific materiality threshold
We determined a lower level of specific materiality
for the following areas:
We determined a lower level of specific materiality
for the following areas:
Directors’ remuneration and related party transactions.
Directors’ remuneration and related party transactions.
Communication of misstatements to
the audit committee
We determine a threshold for reporting unadjusted differences to the audit committee.
Threshold for communication
£20,000 and misstatements below that threshold that,
in our view, warrant reporting on qualitative grounds.
£3,000 and misstatements below that threshold that,
in our view, warrant reporting on qualitative grounds.
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Financial Statements
Independent Auditor’s Report
to the members of Venture Life Group plc
Our application of materiality continued
The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for potential uncorrected misstatements.
Overall materiality – Group Overall materiality – Parent company
PM
£300,000
75%
Revenue
£30,076,000
FSM £400,000 - 1.3%
Total assets
£73,252,000
FSM £60,000 - 0.1%
TFPUM
£100,000 - 25%
Financial statements materiality
Performance materiality
FSM:
PM:
TFPUM: Tolerance for potential uncorrected misstatements
PM
£45,000
75%
TFPUM
£15,000 - 25%
An overview of the scope of our audit
We performed a risk-based audit that requires an understanding of the Group’s and the parent company’s business and in particular matters related to:
Understanding the group, its components, and their environments
• We obtained an understanding of the Group and its environment. The Group’s accounting process is primarily resourced through a central function within the UK, with
local finance functions in the Netherlands and Italy. Each local finance function reports into the central Group finance function based at the Group’s head office in the UK.
Identifying significant components
• We identified and evaluated the components to assess their significance and to determine the planned audit response based on a measure of materiality.
We determined significance as a percentage of the Group’s total assets, revenues and profit before taxation.
Type of work to be performed on financial information of parent and other components
• Based on our assessment of the Group as above, we focused our Group audit scope primarily on significant manufacturing plant within Italy and the trading operation
within the UK. The components subject to full scope audit procedures were Venture Life Group plc (parent only), Venture Life Limited, Periproducts Limited, Lubatti
Limited and Biokosmes S.r.l. Full scope audit procedures covered 90% of the Group’s revenue, 76% of profit before tax and 97% of total assets;
In addition, the financial information of Nelie BV and PharmaSource BV was subject to specific-scope audit procedures on material account balances, where the extent
of our testing was based on our assessment of the risks of material misstatement and of the size of the Group’s operations at those locations. The two components
accounted for 10% of the Group’s revenue, 24% of profit before tax and 3% of total assets;
•
• At the Group level we also tested the consolidation process and carried out analytical procedures on the financial information of PermaPharm AG and MD Manufactuing
BV to confirm our conclusion that there were no significant risks of material misstatement of the aggregated financial information of those remaining components;
Performance of our audit
• The Group engagement team was unable to visit any of the locations due to travel restrictions imposed.
Communications with component auditors
• The component, Biokosmes S.r.l. was audited by component auditors;
• We attended key meetings with component management and component auditors;
• Subsequent to the travel restrictions being put in place as a result of the COVID -19 pandemic, we arranged for the component audit files to be reviewed remotely
and held regular calls with the local component auditors to discuss the results and resolve any queries.
Changes in approach from previous period
• The entities acquired during the year, Nelie BV, MD Manufacturing BV and PharmaSource BV have been considered in terms of their significance to their Group.
Nelie BV and PharmaSource BV have been subject to specific audit procedures, and analytical procedures have been performed on MD Manufacturing BV.
No. of Coverage Coverage Coverage
Audit approach components total assets revenue PBT
Full-scope audit 5 97% 90% 76%
Specified audit procedures 2 3% 10% 24%
Analytical procedures 2 0% 0% 0%
Other information
The Directors are responsible for the other information. The other information comprises the information included in the annual report and accounts, other than the
financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Our opinion on other matters prescribed by the Companies Act 2006 is unmodified
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the strategic review and the Directors’ Report for the financial year for which the financial statements are prepared is consistent
with the financial statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
•
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Matter on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the Group and the parent company and its environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors’ report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
•
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
the parent company financial statements are not in agreement with the accounting records and returns; or
Responsibilities of Directors for the financial statements
As explained more fully in the statement of Directors’ responsibilities, the Directors are responsible for the preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the parent company’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the parent
company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect
material misstatements in respect of irregularities, including fraud. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatements in
the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK).
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
• We obtained an understanding of the legal and regulatory frameworks applicable to the parent company and the Group and industry in which they operate.
We determined that the following laws and regulations were most significant: international accounting standards in conformity with the requirements of the
Companies Act 2006, FRS 102, Companies Act 2006 and the relevant tax compliance regulations in the jurisdictions in which the Group operates;
• We obtained an understanding of how the parent company and the Group is complying with those legal and regulatory frameworks by making inquiries of
management and those responsible for legal and compliance procedures. We corroborated our inquiries through our review of Board minutes;
• We assessed the susceptibility of the parent company’s and the Group’s financial statements to material misstatement, including how fraud might occur.
Audit procedures performed by the Group engagement team and component auditors included:
- evaluating the design and implementation of relevant key controls over revenue that management has in place to prevent and detct fraud;
- challenging assumptions and judgements made by management in its significant accounting estimates; and
-
identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
• The assessment of the appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team’s:
- understanding of, and practical experience with, audit engagements of a similar nature and complexity through appropriate training and participation; and
- knowledge of the industry in which the Group operates.
• Team communications in respect of potential non-compliance with laws and regulations and of fraud included the potential for fraud in revenue recognition.
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This is also reported as a key audit matter in the key audit matters section of our report where the matter is explained in more detail and the specific procedures
we performed in response to the key audit matter are described in more detail;
In assessing the potential risks of material misstatement, we obtained an understanding of:
-
the parent company’s and the Group’s operations, including the nature of its revenue sources, products and services and of its objectives and strategies to
understand the classes of transactions, account balances, expected financial statement disclosures and business risks that may result in risks of material
misstatement; and
the parent company’s and the Group’s control environment.
-
• For components at which audit procedures were performed, we requested component auditors to report to us instances of non-compliance with laws and
regulations that gave rise to a risk of material misstatement of the Group financial statements. No such matters were identified by the component auditors.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body,
for our audit work, for this report, or for the opinions we have formed.
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Mark Bishop FCA
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Oxford
24 March 2021
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Financial Statements
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2020
Company number 05651130
Year ended Year ended
31 December 31 December
2020 2019
Notes £’000 £’000
Restated*
Revenue 5 30,076 20,206
Cost of sales (17,229) (12,203)
Gross profit 12,847 8,003
Administrative expenses
Operating expenses (7,980) (6,071)
Impairment losses of financial assets 18 (405) (30)
Amortisation of intangible assets 15 (909) (579)
Total administrative expenses (9,294) (6,680)
Other income 169 163
Operating profit before exceptional items 3,722 1,486
Exceptional costs 6 (167) (208)
Operating profit 7 3,555 1,278
Finance income 54 152
Finance costs (333) (68)
Profit before tax 3,276 1,362
Tax 10 (908) (458)
Profit for the year 2,368 904
Other comprehensive income:
Items that will be reclassified subsequently to profit or loss
Foreign exchange gain / (loss) on translation of subsidiaries (restated*) 1,284 (755)
Total comprehensive profit for the year attributable to equity holders of the parent 3,652 129
*
see notes 3.4 b) and 32 for more information on the prior period adjustment.
All of the profit and the total comprehensive income for the year is attributable to equity holders of the parent.
Year ended Year ended
31 December 31 December
2020 2019
Profit per share
Basic profit per share (pence) 12 2.74 1.08
Diluted profit per share (pence) 12 2.53 1.01
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Consolidated Statement of Financial Position
at 31 December 2020
Company number 05651130
At At At
31 December 31 December 1 January
2020 2019 2019
Notes £’000 £’000 £’000
Restated* Restated*
Assets
Non-current assets
Intangible assets 14, 15 27,024 20,914 21,209
Property, plant and equipment 16 7,018 4,152 4,591
34,042 25,066 25,800
Current assets
Inventories 17 8,886 5,082 3,869
Trade and other receivables 18 7,653 6,363 7,020
Cash and cash equivalents 19 42,095 10,710 9,623
58,634 22,155 20,512
Total assets 92,676 47,221 46,312
Equity and liabilities
Capital and reserves
Share capital 20 377 251 251
Share premium account 20 65,738 30,824 30,824
Merger reserve 21 7,656 7,656 7,656
Foreign currency translation reserve 22 1,429 145 919
Share-based payments reserve 23 660 624 609
Retained earnings 24 (3,751) (6,492) (7,512)
Total equity attributable to equity holders of the parent 72,109 33,008 32,747
Liabilities
Current liabilities
Trade and other payables 25 7,108 5,491 4,868
Taxation 433 218 -
Interest-bearing borrowings 26 2,457 2,434 1,911
9,998 8,143 6,779
Non-current liabilities
Interest-bearing borrowings 26 8,721 4,591 5,157
Statutory employment provision 27 1,201 1,058 1,062
Deferred tax liability 11 647 421 567
10,569 6,070 6,786
Total liabilities 20,567 14,213 13,565
Total equity and liabilities 92,676 47,221 46,312
*
see notes 3.4 b) and 32 for more information on the prior period adjustment.
The financial statements on pages 48 to94 were approved and authorised for issue by the Board on 24 March 2021 and signed on its behalf by:
Jerry Randall
Director
24 March 2021
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Financial Statements
Consolidated Statement of Changes in Equity
for the year ended 31 December 2020
Foreign
Share Currency Share-based
Share Premium Merger translation payments Retained Total
capital account reserve reserve reserve earnings equity
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 January 2019,
as previously reported 251 30,824 7,656 252 609 (7,512) 32,080
Prior period adjustment* - - - 667 - - 667
Restated balance at 1 January 2019 251 30,824 7,656 919 609 (7,512) 32,747
Profit for the year - - - - - 904 904
Foreign exchange on translation (restated*) - - - (775) - - (775)
Total comprehensive income (restated*) - - - (775) - 904 129
Share-based payments charge - - - - 131 - 131
Share-based payments charge recycling - - - - (115) 115 -
Transactions with shareholders - - - - 16 115 131
Restated balance at 1 January 2020 251 30,824 7,656 145 624 (6,492) 33,008
Profit for the year - - - - - 2,368 2,368
Foreign exchange on translation - - - 1,284 - - 1,284
Total comprehensive income - - - 1,284 - 2,368 3,652
Share-based payments charge - - - - 409 - 409
Share-based payments charge recycling - - - - (373) 373 -
Contributions of equity, net of transaction costs 126 34,914 - - - - 35,040
Transactions with shareholders 126 34,914 - - 36 373 35,449
Balance at 31 December 2020 377 65,738 7,656 1,429 660 (3,751) 72,109
*
see notes 3.4 b) and 32 for more information on the prior period adjustment.
As at 31 December 2020 the parent entity has lacked distributable reserves and is accordingly not in a position to declare any dividend.
During the year the third tranche of the management long-term incentive matured but did not meet its vesting conditions. The respective accumulated
provision within the Share Based Payments reserve of £129,000 was discharged and recycled into retained earnings. In addition a number of employee
stock option contracts were successfully exercised during the year and the respective accumulated provision within the Share Based Payments
reserve of £244,000 was similarly discharged and recycled into retained earnings.
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Consolidated Statement of Cash Flows
for the year ended 31 December 2020
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Cash flow from operating activities
Profit before tax 3,276 1,362
Finance (income)/expense 279 (84)
Operating profit 3,555 1,278
Adjustments for:
– Depreciation of property, plant and equipment 16 1,081 786
– Impairment losses of financial assets 18 405 30
– Amortisation of intangible assets 15 909 579
– Loss on disposal of non-current assets 15 345 147
– Share-based payment expense 409 131
Operating cash flow before movements in working capital 6,704 2,951
Increase in inventories (3,294) (1,373)
Increase in trade and other receivables (1,161) (265)
Increase in trade and other payables 1,403 1,507
Cash generated from operations 3,652 2,820
– Finance cost (50) 32
– Tax paid (896) (412)
Net cash from operating activities 2,706 2,440
Cash flow from investing activities:
Acquisition of subsidiaries, net of cash acquired 14 (5,465) -
Purchases of property, plant and equipment 16 (1,248) (388)
Expenditure in respect of intangible assets 15 (821) (757)
Net cash used in investing activities (7,534) (1,145)
Cash flow from financing activities:
Proceeds from issuance of ordinary shares 20 36,997 -
Transaction costs incurred from issue of ordinary shares 20 (1,957) -
Drawdown of interest-bearing borrowings 26 5,428 3,784
Repayment of interest-bearing borrowings 26 (3,433) (3,088)
Leasing obligation repayments 26 (764) (585)
Net cash from financing activities 36,271 111
Net increase in cash and cash equivalents 31,443 1,406
Net foreign exchange difference (58) (319)
Cash and cash equivalents at beginning of period 10,710 9,623
Cash and cash equivalents at end of period 19 42,095 10,710
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
1. General information
Venture Life Group plc (“the Company”) was incorporated on 12 December 2005 and is domiciled in the UK, with its registered office located
at Venture House, 2 Arlington Square, Downshire Way, Bracknell, RG12 1WA. The Company is the holding company for three wholly-owned UK
subsidiaries, one wholly-owned Irish subsidiary (Venture Life Consumer Healthcare Europe Ltd), one wholly-owned Italian subsidiary, Biokosmes
S.r.l, one wholly-owned Netherlands group, Nelie BV (which wholly-owns PharmaSource BV and MD Manufacturing BV) and one wholly-owned
Swiss subsidiary, PermaPharm AG. These seven subsidiaries, including the two subsidiaries of Nelie BV and the Company, are together referred
to as “the Group”. The three Netherlands entities collectively trade under the trading name of “PharmaSource” and are hence referred to hereinafter
as the PharmaSource group.
2. Basis of preparation
The principal activities of Venture Life Group plc and its subsidiaries are the development and commercialisation of healthcare products, including
oral care products, food supplements, medical devices and dermo-cosmetics for the ageing population; the development and commercialisation
of cosmetic products; and the manufacturing of a range of topical products for the healthcare and cosmetic sectors.
The financial statements have been prepared on a going concern basis under the historical cost convention and in accordance with International
Accounting Standards (“IASs”) in conformity with the requirements of the Companies Act 2006, the International Financial Reporting Interpretations
Committee (“IFRIC”), interpretations issued by the International Accounting Standards Boards (“IASB”) that are effective or issued and adopted as at
the time of preparing these financial statements, and in accordance with the provisions of the Companies Act 2006 that are relevant to companies
that report under IFRSs.
The preparation of the Group’s financial statements requires management to exercise its judgements in the process of applying accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in Note 3.22.
3. Summary of significant accounting policies
The principal accounting policies adopted are set out below.
3.1 Going concern
The company has been managing the impact of the COVID-19 pandemic on its business for much of 2020 and on a continuing basis into 2021.
The uncertainty that this might bring has the potential in the worst-case scenario to create a significant shortfall versus the 2021 budgeted trading
results and cashflows. The company manufactures a high proportion of its products in its own facility in Lombardy, Italy which had been an
epicentre of this pandemic outbreak during 2020. In spite of this risk, the company executed a number of precautionary and protective actions
to protect the health and wellbeing of the staff whilst maintaining business operations.
Specifically in Italy, the company introduced three main activities:
a) Introduction of stringent procedures to protect staff, including the provision of masks and handwashes, the physical separation of employees
and restrictions to meeting sizes, the control of attendees and visitors to the premises and other measures including regular staff testing and
extensive deep cleaning of the facilities. The administrative workforce continues to work partly from home and partly on site subject to social
distancing, and the on-site production workforce has been broken into smaller operating teams;
b) Procurement of critical raw materials to not only meet customer demand for existing production but to enable additional manufacture of
handwashes and anti-microbial products;
c) Strategic prioritisation of customer orders to ensure that the existing inventory of finished goods (and work-in-progress as it becomes completed)
is allocated appropriately to those parties based upon need, continuity of supply and other factors in order to ensure the demand is met.
Specifically in the UK and Netherlands the administrative workforce continues to work partly from home and partly on site subject to social
distancing and regular cleaning and sanitising activities.
As a direct result of these measures, at 23 March 2021 the Italian factory has remained open throughout the pandemic and is producing high
volumes of product. Shipments of finished goods to customers are continuing as are invoicing and cash collection processes. The majority of
Venture Life Group’s customers are large organisations and it is the opinion of the Directors that bad debts will remain a relatively low risk. The UK
and Netherlands functions have remained fully functional from a new operating norm, comprising a blend of office attendance and remote working.
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In spite of the very positive situation of maintaining all business functions throughout 2020 and into 2021, the Directors have, as a prudent exercise,
evaluated a range of scenarios all depicting varying months of closure of the Italian factory and associated losses of marginal gross profits. The key
findings of this evaluation are:
a) Management does not expect the Italian factory to close, but acknowledges that there is a clear risk that it could face the need to close
for a period of up to one month. The impact of this one-month closure would be minor in terms of 2021/2022 performance and closing cash
at 30 June 2022 is forecast to be far in excess of £20.0 million. Given the strong inventory that the company holds, there is an expectation that
such a short closure would in practice be managed with £nil impact on 2021 and 2022 performance;
b) A scenario with a more extensive closure to the factory of 3 months yields a significantly reduced PBT for 2021, improving in 2022, and a positive
cash balance on 30 June 2022 far in excess of £20.0 million; and
c) A dramatically more pessimistic scenario with an extensive closure to the factory of 6 months yields a significantly reduced PBT for 2021,
improving into 2022, and a positive cash balance on 30 June 2022 far in excess of £20.0 million. The Directors consider this scenario as
extremely unlikely in practice.
All of these above scenarios are assisted from the outset by the Group’s strong £35.5 million net cash position at 31 December 2020 which
in itself gives a strong level of assurance of the ability of the Group to remain as a Going Concern.
Based upon these financial forecasts, the Directors believe that:
a) The procedures in place in Italy have been effective to date and the company has established a pattern of operating through periods
of lockdown to ensure continuity of business, as well as attainment of local authority acclaim; and
b) The procedures in place in the UK and Netherlands have been effective to date and the company has established a pattern of operating
through periods of lockdown to ensure continuity of business, and
c) The business has sufficient balance sheet strength to weather even an unrealistically long stoppage and remain liquid.
Accordingly, after making enquiries, the Directors foresee that even in the most extreme scenario of a six month factory closure (which is far
beyond any contemplated worst-case scenario), the Group has sufficient resources to continue in operational existence for the foreseeable
future and to comfortably make scheduled loan repayments as they fall due.
The Directors therefore conclude that the Going Concern basis remains the appropriate basis upon which to prepare the
Group’s financial statements.
3.2 Basis of consolidation
The Group financial statements consolidate those of the parent Company and its subsidiaries as at 31 December 2020. All subsidiaries have
a reporting date of 31 December. All transactions and balances between Group companies are eliminated on consolidation, including unrealised
gains and losses between Group companies. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary
to ensure consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date
of acquisition, or up to the effective date of disposal, as applicable.
The Group attributes total comprehensive income or loss of subsidiaries between owners of the parent and the controlling interest based on their
respective ownership interests.
3.3 Business combinations
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration for each acquisition is measured
at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, including contingent liabilities and equity
instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.
Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement,
measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify
as measurement period adjustments. All subsequent changes in the fair value of contingent consideration classed as an asset or liability are
accounted for in accordance with relevant IFRSs. Changes in the fair value of contingent consideration classified as equity are not recognised.
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
3. Summary of significant accounting policies continued
3.4 Foreign currencies
a) Functional and presentational currency
Items included in the financial information of each of the Group’s entities are measured using the currency of the primary economic environment
in which the entity operates (“the functional currency”). The consolidated financial information is presented in UK sterling (£), which is the Group’s
presentational currency. The functional currency of the Company is also UK sterling (£), which is the currency of the Company’s operating expenditure.
b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the average exchange rate of the month. At each statement of
financial position date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date.
Foreign exchange gains and losses resulting from such transactions are recognised in profit or loss.
Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when
the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
In the Group’s financial statements, all assets, liabilities and transactions of Group entities with a functional currency other than sterling are
translated into sterling upon consolidation. The functional currency of the entities in the Group has remained unchanged during the period.
On consolidation, assets and liabilities have been translated into sterling at the closing rate at the reporting date. Goodwill and fair value
adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated into GBP at
the closing rate. Income and expenses have been translated into sterling at the average rate each month over the reporting period. Exchange
differences are charged or credited to other comprehensive income and recognised in the currency translation reserve in equity. On disposal
of a foreign operation, the related cumulative translation differences recognised in equity are reclassified to profit or loss and are recognised
as part of the gain or loss on disposal.
The sterling/euro exchange rates used in the Annual Financial Statements and the prior reporting period are as follows:
Year ended Year ended
31 December 31 December
Sterling/euro exchange rates 2020 2019
Average exchange rate for the period 1.124 1.140
Exchange rate at the period end 1.113 1.171
3.5 Revenue recognition
Revenue of the Group arises mainly from the sale of goods in both the Venture Life Brands and Customer Brands segments.
To determine whether to recognise revenue, the Group follows a 5-step process:
•
•
• Determining the transaction price
• Allocating the transaction price to the performance obligations
• Recognising revenue when/as performance obligation(s) are satisfied.
Identifying the contract with a customer
Identifying the performance obligations
The Group typically enters into transactions involving the development and manufacture of the Group’s or customer’s own products. In each case,
the total transaction price for a contract is allocated amongst the various performance obligations based on their relative standalone selling prices.
The transaction price for a contract excludes any amounts collected on behalf of third parties.
The Group discounts its selling prices from time to time and these discounts are reflected as a reduction in revenue in the month in which the
discounts are granted. The Group’s terms of trade with certain customers include discounts and allowances that are dependent upon future selling
volumes. Estimates of these sums are deducted from revenue upon initial recognition and corrections are made retrospectively based upon the
achieved selling volumes. The Group’s management reviews the expected level of such discounts at the end of each accounting period to ensure
appropriate deductions have been recognised within revenue.
Revenue from the sale of goods is recognised at the point in time when ownership has transferred to the customer. For Venture Life Brands supplied
directly to retailers, this moment occurs upon delivery to the retailer’s warehouse. For supplies of Venture Life Brands to distribution partners, as well
as supplies of Customer Brands to their relevant partners, this takes place at the Group’s production facility upon collection by the customer.
Revenue from the performance of development services is recognised over time on a right-to-invoice basis as the Group satisfies
performance obligations.
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The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts
as other liabilities in the statement of financial position. Similarly, if the Group satisfies a performance obligation before it receives the consideration,
the Group recognises either a contract asset or a receivable in its statement of financial position, depending on whether something other than the
passage of time is required before the consideration is due. There are no contract assets held by the Group at the balance sheet date.
The majority of the revenue of the Group arises from the sale of goods and is therefore reflected at a point in time.
3.6 Exceptional items
Items that are material because of their size or nature, and which are non-recurring and whose significance is sufficient to warrant separate
disclosure and identification within the consolidated financial statements are referred to as exceptional items. The separate reporting of
exceptional items helps to provide an understanding of the Group’s underlying performance.
3.7 Property, plant and equipment
Equipment is stated at cost less accumulated depreciation and any provision for impairment.
Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.
Depreciation is charged so as to write off the costs of assets over their estimated useful lives, on the following basis:
Office equipment over £500 25%-50% per annum, straight-line
Fixtures and fittings over £500 20%-50% per annum, straight-line
Manufacturing plant equipment 4%-50% per annum, straight-line
An item of property, plant and equipment is de-recognised upon disposal or when no future economic benefits are expected from its use.
The gain or loss arising on the disposal of an asset is determined as the difference between the sales proceeds and the carrying amount
of the asset and is recognised in profit or loss.
The assets’ residual values, useful lives and methods of depreciation are all reviewed at each financial year end and adjusted prospectively,
if appropriate.
Depreciation for the year has been charged to administrative expenses in the Statement of Comprehensive Income.
3.8 Internally generated development intangible assets
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
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the technical feasibility of completing the intangible asset so that it will be available for use or sale;
its intention to complete the intangible asset and use or sell it;
its ability to use or sell the intangible asset;
An internally generated development intangible asset arising from the Group’s product development is recognised if, and only if,
the Group can demonstrate all of the following:
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• how the intangible asset will generate probable future economic benefits;
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the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
its ability to measure reliably, the expenditure attributable to the intangible asset during its development.
Where no internally generated intangible asset can be recognised, development expenditure is recognised as an expense in the period
in which it is incurred.
Internally generated development intangible assets are recognised at cost less accumulated amortisation and provisions for impairment.
Amortisation is provided on a straight-line basis over the useful lives of the assets, commencing from the point where the final marketable product
is completed, at the following rates:
Development costs 20% per annum, straight-line
3.9 Licences and trademarks intangible assets
Patents, trademarks and licences are measured at purchase cost less accumulated amortisation and provision for impairment.
Amortisation is provided on a straight-line basis over the estimated useful lives of the assets ranging from 5-10 years.
Amortisation for the year has been charged to administrative expenses in the Statement of Comprehensive Income.
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
3. Summary of significant accounting policies continued
3.10. Acquired intangible assets
The Group recognises value in respect of acquired intangible assets at cost less accumulated amortisation and impairment. Initial recognition
is at fair value and amortisation takes place across their useful economic lives except when such lives are determined to be infinite.
The effective life of each new class of intangible asset acquired is determined as follows:
Brands – expected cash-generating life of the name, term, design, symbol or other feature that identifies the product as distinct from those
of other sellers.
Customer relationships – expected cash-generating life of the commercial relationship.
Distribution agreements – expected cash-generating life of the commercial relationship.
Product formulations – expected cash-generating life of the particular product formulation.
The following useful economic lives are applied:
Brands: The application of an indefinite life to certain acquired brands is appropriate due to the stable long-term nature of the business and
the enduring nature of the brand. Indefinite life brands are tested at least annually for impairment. A review of the useful economic life
of brands is performed annually, to ensure that these lives are still appropriate. The carrying value of a Brand that is considered to have
a finite life is amortised over that period. In reaching a determination that an asset has an indefinite life in accordance with IAS 38 the
Directors consider a number of factors including:
i) length of time the brand has been established in the marketplace;
ii) stability of the industry in which the brand is traded;
iii) potential for obsolescence and erosion of sales;
iv) competitors and barriers to entry;
v) availability of marketing and promotional resources; and
vi) any dependencies on other assets having finite economic lives.
Many such indefinite life assets have patent protection, which have finite lives. It is the opinion of the Directors that these patents do not provide
any incremental value and therefore no separate value has been placed on these patents. In reaching their determination, the Directors assess
future profitability before and after patent expiry based upon past experience with similar assets.
3.11 Goodwill
Goodwill represents the future economic benefits arising from a business combination that are not individually identified and separately recognised.
Goodwill is carried at cost less accumulated impairment losses. Refer to Note 3.12 for a description of impairment testing.
3.12 Impairment of tangible and intangible assets
At each reporting date, the Group reviews the carrying amounts of its assets, including those acquired in Business Combinations, to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from
other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. An intangible asset, such as
goodwill, with an indefinite useful life is tested for impairment at least annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.
The Directors have carried out an impairment review of the Group’s tangible and intangible assets as at the reporting date, as is its normal practice.
They have assessed the likely cash flows to be generated by those assets and determined that they are stated at fair value and that consequently
no impairment is necessary. See Note 15 on intangible assets for further details.
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3.13 Inventories
Inventories are stated at the lower of historical cost and net realisable value. Costs comprise direct materials and, where applicable, direct labour
costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the
average cost method. Net realisable value represents the estimated selling prices less all estimated costs of completion and costs to be incurred in
marketing, selling and distribution.
3.14 Financial instruments
Financial assets and financial liabilities are recognised in the Group’s Statement of Financial Position when the Group becomes party to the
contractual provisions of the instrument. Financial assets are de-recognised when the contracted rights to the cash flows from the financial asset
expire or when the contracted rights to those assets are transferred. Financial liabilities are de-recognised when the obligation specified in the
contract is discharged, cancelled or expired.
Financial assets
a) Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method
less provision for impairment. Appropriate provisions for estimated irrecoverable amounts are recognised in profit or loss based upon an expected
credit loss model. The amount of the provision is the difference between the carrying amount and the present value of estimated future cash flows.
Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be
immaterial. Trade and other receivables are classified in the financial instruments Note 29 as financial assets at amortised cost’.
b) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits held on call with banks, and other short-term highly liquid investments with
original maturities of three months or less that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes
in value. Cash and cash equivalents are classified in the financial instruments Note 29 as “financial assets at amortised cost”.
Financial liabilities and equity
a) Trade and other payables
Trade payables are initially measured at their fair value and are subsequently measured at their amortised cost using the effective interest rate
method; this method allocates interest expense over the relevant period by applying the “effective interest rate” to the carrying amount of the
liability. Trade and other payables are classified in the financial instruments Note 29 as “liabilities”.
b) Statutory employment provision
Statutory employment provision includes the liability for severance indemnities related to employees of the Group’s Italian subsidiary. The severance
indemnity liability arises under Italian law and is calculated with reference to each employee’s length of service, employment category and
remuneration. There is no vesting period or funding requirement associated with the liability. The liability recorded at the reporting date is based on
the aggregate amount that the employees of the Group’s Italian subsidiary would be entitled to on termination of employment for whatever reason.
c) Invoice financing
The Group utilises an invoice financing with recourse facility whereby the Group continues to recognise the receivables and the amount received
under the facility is recorded as a liability. Cash received is classified as a financing cash inflow. When cash is collected from the customer, the liability
and the receivables are de-recognised. De-recognition of the liability is presented as a financing cash outflow and the settlement of the receivables
as an operating cash inflow. Further details are provided in note 26.
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
3. Summary of significant accounting policies continued
3.15 Leases
The Group makes the use of leasing arrangements principally for the provision of the main operating location and related facilities, office space,
office equipment and motor vehicles. The rental contracts for offices are typically negotiated for terms of between 3 and 6 years and some of
these have extension terms. Lease terms for office fixtures and equipment and motor vehicles have lease terms of between 6 months and 3 years
without any extension terms. The Group does not enter into sale and leaseback arrangements. All the leases are negotiated on an individual basis
and contain a wide variety of different terms.
The Group assesses whether a contract is or contains a lease at inception of the contract. A lease conveys the right to direct the use and obtain
substantially all of the economic benefits of an identified asset for a period of time in exchange for consideration.
At lease commencement date, the Group recognises a right-of-use asset and a lease liability in its consolidated statement of financial position.
The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the
Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease
commencement date (net of any incentives received).
The Group depreciates the right-of-use asset on a straight-line basis from the lease commencement date to the earlier of the end of the useful life
of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using
the Group’s incremental borrowing rate because, as the lease contracts are negotiated with third parties, it is not possible to determine the interest
rate that is implicit in the lease. The incremental borrowing rate is the estimated rate that the Group would have to pay to borrow the same amount
over a similar term, and with similar security to obtain an asset of equivalent value. This rate is adjusted should the lessee entity have a different risk
profile to that of the Group.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments
based on an index or rate, and payments arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced by lease payments that are allocated between repayments of principal and finance
costs. The finance cost is the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability.
The lease liability is reassessed when there is a change in the lease payments. Changes in lease payments arise typically from a change in the lease
term. The revised lease payments are discounted using the Group’s incremental borrowing rate at the date of reassessment when the rate implicit
in the lease cannot be readily determined. The amount of the remeasurement of the lease liability is reflected as an adjustment to the carrying
amount of the right-of-use asset. The exception being when the carrying amount of the right-of-use asset has been reduced to zero, then any
excess is recognised in profit or loss.
Payments under leases can also change when future payments change through an index or a rate used to determine those payments, including
changes in market rental rates following a market rent review. The lease liability is remeasured only when the adjustment to lease payments takes
effect and the revised contractual payments for the remainder of the lease term are discounted using an unchanged discount rate.
Further details are given in Note 28.
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3.16 Current and deferred tax
The tax expense represents the sum of the tax currently payable and deferred tax.
a) Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.
The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.
b) Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial
information and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability
method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are
not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on tax
laws and rates that have been enacted or substantively enacted at the Statement of Financial Position date. Deferred tax is charged or credited in
the income statement, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also
dealt with in other comprehensive income.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when
they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
3.17 Employee benefits
All employee benefit costs, notably holiday pay, bonuses and contributions to personal pension plans are charged to the Consolidated Statement
of Comprehensive Income on an accruals basis.
3.18 Pension contributions
The Group contributes to the Group stakeholder pension arrangement or personal pension plans of certain employees.
Contributions are charged to the Consolidated Statement of Comprehensive Income as they become payable.
3.19 Share-based payments
The Company issues equity-settled share-based payments to certain employees and others under which the Group receives services as
consideration for those equity instruments in the Company. Equity-settled share-based payments are measured at fair value at the date of grant
by reference to the fair value of the equity instruments granted. The fair value determined at the grant date of equity-settled share-based payments is
recognised as an expense in the Group’s Statement of Comprehensive Income over the vesting period on a straight-line basis, based on the Group’s
estimate of the number of instruments that will eventually vest with a corresponding adjustment to equity. The expected life used in the valuation is
adjusted, based on management’s best estimate, for the effect of non-transferability, exercise restrictions, and behavioural considerations.
Non-vesting and market vesting conditions are taken into account when estimating the fair value of the awards at grant date. Service and
non-market vesting conditions are taken into account by adjusting the number of share options expected to vest at each reporting date.
Options over the Company’s shares granted to employees of subsidiaries are recognised as a capital contribution by the Company to the subsidiaries.
When the share options are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction costs
are credited to share capital (nominal value) and share premium.
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
3. Summary of significant accounting policies continued
3.20 Fair value estimation of financial assets and liabilities
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values because
of the short-term nature of such assets.
3.21 Equity, reserves and dividend payments
Share capital represents the nominal (par) value of shares that have been issued.
Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares
are deducted from share premium, net of any related income tax benefits.
Other components of equity include the following reserves:
• merger reserve comprising the non-statutory premium arising on shares issued as consideration for acquisition of subsidiaries where
merger relief under Section 612 of the Companies Act 2006 applies less subsequent realised losses relating to those acquisitions;
• share-based payments reserve comprising cumulative amounts charged in respect of employee share-based payment arrangements
•
which have not been settled by means of an award of shares to the employee;
foreign currency translation reserve comprising all foreign exchange differences arising from the translation of the financial statements
of foreign operations where their functional currency is different to the Group’s presentation currency.
Retained earnings includes all current and prior period retained profits and losses. All transactions with owners of the parent are recorded
separately within equity. Dividend distributions payable to equity shareholders are included in other liabilities when the dividends have been
approved in a general meeting prior to the reporting date.
3.22 Critical accounting estimates and judgements
The preparation of these financial statements requires management to make judgements and estimates that affect the reported amounts
of assets and liabilities at each Statement of Financial Position date and the reported amounts of revenue during the reporting periods.
Actual results could differ from these estimates. Information about such judgements and estimations are contained in individual accounting
policies. The key judgements and sources of estimation uncertainty that could cause an adjustment to be required to the carrying amount of
assets or liabilities within the next accounting period are outlined below:
a) Judgements
i) Capitalisation of internally generated development costs
Expenditure on Group product development is reviewed throughout each of the years represented in these financial statements to assess
whether it meets the six accounting criteria referenced in Note 3.8. Where the Group can demonstrate that the expenditure meets each
of the criteria it is capitalised, with the balance of expenditure expensed to the income statement.
Costs are amortised over five years once the projects are recorded as complete.
ii) Selection of suitable accounting treatments for acquisitions
The Directors exercise judgement in their choice of accounting treatment applied to acquisitions. This judgement takes into account the economic
resources and systems acquired and the respective outputs produced and considers the extent to which such acquisition comprises all or some
of such elements. In circumstances where substantially all elements are acquired, then the acquisition is treated as a business combination in
accordance with IFRS 3.
iii) Assessing the economic life of intangible assets
The Directors exercise judgement when assessing the economic life of intangible assets. This involves making a judgement of the strength and
longevity of the asset and the number of years that it is expected to generate revenues and profits and makes reference to the market position,
competitors, availability of marketing promotional resources, experience with other intangible assets and other factors.
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b) Estimates
i) Recoverability of internally generated intangible assets
In each of the years represented in these financial statements, there is a considerable balance relating to non-current assets, including
development costs, patents and trademarks. The Group’s accounting policy covering the potential impairment of intangible assets is covered
in Note 3.12 to these financial statements. Estimation uncertainties relate to assumptions about future operating results and the determination
of a suitable discount rate.
An impairment review of the Group’s patent and trademark balances is undertaken at each year end. This review involves the generation of
estimates of future projected income streams that will result from the ownership of the development costs, patents and trademarks. The expected
future cash flows are modelled over the remaining useful life of the respective assets and discounted present value in order to test for impairment.
In each of the years ended 31 December 2019 and 2020, no impairment charge was recognised as a result of these reviews of capitalised
development costs, patents and trademarks.
ii) Impairment of other non-financial assets
Estimation uncertainties are discussed in note 15. The Group conducts annual impairment reviews of assets, such as goodwill, when events
or changes in circumstances indicate that their carrying amounts may not be recoverable, or in accordance with the relevant accounting standards.
An impairment loss is recognised when the carrying amount of an asset is higher than the greater of its net selling price or the value in use.
In determining the value in use, management assesses the present value of the estimated future cash flows expected to arise from the continuing
use of the asset and from its disposal at the end of its useful life. Estimates and judgements are applied in determining these future cash flows and
the discount rate. These assumptions relate to future events and circumstances. The actual results may vary and may cause adjustments to the
Group’s assets in future financial years. Details of the estimates and assumptions made in respect of the potential impairment of goodwill are
detailed in Note 15 to the financial statements.
The Directors considered that no impairment was necessary in respect of goodwill recognised in the years ended 31 December 2019
and 31 December 2020.
iii) Fair values on acquisition
When acquiring a business, the Directors have to make judgements and best estimates about the fair value of the assets, liabilities and contingent
liabilities acquired. These are estimated regardless of whether or not they were recognised in the financial statements of the subsidiary prior to
acquisition. The valuation of externally acquired assets such as products, data or technologies, requires judgements regarding the estimated future
cash outflows required to commercialise the asset(s) and the cash inflows expected to arise from such commercialisation, discounted at a suitable
rate reflecting the time value of money and the risks inherent in such activities. Estimation uncertainties relate to assumptions about future
operating results and the determination of a suitable discount rate.
The valuation of other acquired intangible assets, such as customer relationships and product formulations, also requires judgements regarding
estimated future cash flows arising from those established assets, discounted to reflect the time value of money.
iv) Amortisation periods
When acquiring a business, the Directors make best estimates about the future life of acquired assets. These best estimates are based on historic
trends and the future of existing commercial relationships to determine a suitable future working life of each asset. Estimation uncertainties in these
estimates relate to technical advances in the market place and customer demand. See Note 15 for further details.
3.23 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that
is necessary to complete and prepare the asset for its intended use or sale. Capitalisation of borrowing costs is suspended during extended
periods in which it suspends active development of a qualifying asset. Active development periods significantly in excess of a year are considered
to be substantial enough for capitalisation to commence. Other borrowing costs are expensed in the period in which they are incurred and reported
in finance costs. No borrowing costs were capitalised in the year.
4. Accounting developments
a) New standards, amendments and interpretations issued and adopted
No amendments to these financial statements have been made as a result of adopting new and revised standards and interpretations.
b) New standards, amendments and interpretations issued but not effective for the financial year beginning 1 January 2020
and not adopted early
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
5. Segmental information
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (“CODM”).
The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the
Group Directors.
Management has determined the operating segments based on the reports reviewed by the Group Board of Directors (Chief Operating Decision Maker)
that are used to make strategic decisions. The Board considers the business from a line-of-service perspective and uses operating profit/(loss) as its
profit measure. The operating profit/(loss) of operating segments is prepared on the same basis as the Group’s accounting operating profit.
In summary, the operations of the Group are segmented as:
• Venture Life Brands, which includes sales of branded healthcare and cosmetics products, where the brand is owned within Venture Life Group,
direct to retailers and under distribution agreement. This segment includes the acquisitions of Periproducts Ltd, the Dentyl Brand and the
PharmaSource Group.
• Customer Brands, which includes sales of products and services under contract development and manufacturing agreements, where the brand
is not owned by the Venture Life Group. This segment includes the acquisition of Biokosmes S.r.l.
5.1 Segment revenue and results
The following is an analysis of the Group’s revenue and results by reportable segment:
Venture
Life Customer Consolidated
Brands Brands Group
£’000 £’000 £’000
Year ended 31 December 2020
Revenue
Sale of goods 14,910 20,854 35,764
Sale of services - 672 672
Intercompany sales elimination - (6,360) (6,360)
Total external revenue 14,910 15,166 30,076
Results
Operating profit before exceptional items and excluding central administrative costs 4,551 3,060 7,611
Year ended 31 December 2019
Revenue
Sale of goods 6,699 15,088 21,787
Sale of services - 420 420
Intercompany sales elimination - (2,001) (2,001)
Total external revenue 6,699 13,507 20,206
Results
Operating profit before exceptional items and excluding central administrative costs 626 2,827 3,453
All revenue of the Group is recognised at point in time with the exception of the supply of services which is recognised over time in accordance
with IFRS 15.
The reconciliation of segmental operating profit to the Group’s profit before tax is as follows:
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Operating profit before exceptional items and excluding central administrative costs 7,611 3,453
Exceptional items (167) (208)
Central administrative costs (3,889) (1,967)
Finance income / (costs) (279) 84
Profit before tax 3,276 1,362
One customer generated revenue of £5,449,000 which accounted for 10% or more of total revenue (2019: one customer generated revenue
of £4,083,000 which accounted for 10% or more of total revenue).
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5.2 Segmental assets and liabilities
At At
31 December 31 December
2020 2019
£’000 £’000
Assets
Venture Life Brands 22,695 16,148
Customer Brands 31,379 26,897
Central Group assets 38,602 4,176
Consolidated total assets 92,676 47,221
Liabilities
Venture Life Brands 7,685 4,035
Customer Brands 12,176 9,737
Central Group liabilities 706 441
Consolidated total liabilities 20,567 14,213
5.3 Other segmental information
Depreciation Addition to
and non-current
amortisation assets
£’000 £’000
Year ended 31 December 2020
Venture Life Brands 129 5,465
Customer Brands 1,471 2,069
Central administration 390 -
1,990 7,534
Year ended 31 December 2019
Venture Life Brands 153 64
Customer Brands 1,076 1,003
Central administration 136 -
1,365 1,067
5.4 Geographical information
The Group’s revenue from external customers by geographical location of customer is detailed below:
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Revenue
UK 11,135 7,615
Italy 9,801 6,279
Switzerland 2,638 2,987
Germany 1,352 174
Netherlands 1,185 510
Rest of Europe 1,234 1,554
China 2,329 547
Rest of the World 402 540
Total revenue 30,076 20,206
The aggregated amount of transaction prices which relate to the performance obligations from existing contracts that are unsatisfied or partially
unsatisfied as at 31 December 2020 is £233,000 (2019: £6,000). Revenue is expected to be recognised in 2021.
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
6. Exceptional items
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Costs incurred in due diligence pertaining to prospective acquisitions 77 96
Costs incurred in the acquisition of the PharmaSource BV business (completed 24 January 2020) 90 112
Total exceptional items 167 208
During the period the Group incurred legal and professional fees in relation to the acquisition of PharmaSource BV which was completed during
the year as well as further works in relation to prospective acquisitions.
7. Operating profit
Operating profit for the year has been arrived at after charging:
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Depreciation of property, plant and equipment included in operating expenses 1,081 786
Amortisation of intangible assets included in administrative expenses 909 579
Research and development costs included in operating expenses 548 194
Share-based payments charge 409 131
Staff costs excluding share-based payment charge (Note 8) 6,396 4,995
Auditor’s remuneration:
- Fees for the audit of the Company’s annual accounts 88 55
- Audit of the accounts of the Company’s subsidiaries 26 20
- Audit related assurance services 9 4
- BREXIT related advice - 6
8. Employee information
The average number of staff, including Executive Directors, employed by the Group during the year are as shown below:
Year ended Year ended
31 December 31 December
2020 2019
Number Number
Product development and manufacturing 82 68
Sales and marketing 11 11
Directors 7 7
Administration 19 15
Total 119 101
Their aggregate remuneration comprises:
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Wages and salaries 4,923 3,784
Social security costs 1,016 806
Pension costs 317 295
Other benefits 140 110
Equity settled share-based payments 409 131
Total 6,805 5,126
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The aggregate remuneration is charged within the Financial Statements as follows:
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Charged into cost of sales and a proportion absorbed into closing inventory 2,452 1,834
Charged into research and development costs and a proportion into capitalised development costs 426 390
Charged into operating expenses 3,927 2,902
Total 6,805 5,126
The aggregate remuneration of the key management personnel of the Group (who are all persons with decision making responsibilities [PDMRs]) comprises:
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Wages and salaries 1,191 901
Social security costs 162 109
Pension costs 89 96
Other benefits 8 5
Equity settled share-based payments 295 94
Total 1,745 1,205
Further information on Directors’ remuneration is included in the Remuneration Report on page 39.
9. Pension costs and other post-retirement benefits
The Group operates a stakeholder pension scheme to which it makes contributions. As an alternative, the Group also makes contributions into
the personal pension schemes of certain employees. For the Group’s Italian subsidiary, a severance indemnity liability is created as required under
Italian law (see Note 27). The pension charge represents contributions payable by the Group including the Italian severance indemnity liability and
amounted to £317,000 (2019: £295,000). At year end an amount of £nil (2019: £nil) was payable in respect of pension contributions charged during
the year. Amounts relating to the Italian severance indemnity liability are paid when they fall due.
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
10. Income tax expense
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Current tax:
Current tax on profits for the year 1,184 627
Adjustments in respect of earlier years (209) (30)
Total current tax expense 975 597
Deferred tax:
Origination and reversal of temporary differences (67) (139)
Total deferred tax expense (67) (139)
Total income tax expense 908 458
Tax on the Group’s profit/(loss) before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable
to profits and losses of the consolidated entities as follows:
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Profit before tax 3,276 1,362
Profit before taxation multiplied by the local tax rate of 19% (2019: 19%) 622 259
Expenses not deductible for tax purposes 118 73
Change in recognised deferred tax liability - (139)
Change in unrecognised deferred tax asset 103 100
Higher rate on foreign taxes 65 165
Income tax charge 908 458
In the Spring Budget 2020, the UK Government announced that from 1 April 2020 the corporation tax rate would remain at 19% (rather than
reducing to 17%, as previously enacted). This new law was substantively enacted on 17 March 2020. Deferred taxes at the balance sheet date
have been measured using these enacted tax rates and reflected in these financial statements. In the Spring Budget 2021 the UK Government
announced that from 1 April 2023 the corporation tax rate would rise to 25% on all profits in excess of £250,000. The standard corporation tax
rate in Italy is 24% and there is in addition a regional production tax of 3.9%. Corporation tax rates in the Netherlands are 25% on profits in excess
of €200,000 and 19% on profits below this threshold. A previously announced plan to lower the 25% rate in 2021 has been cancelled and the
corporation tax rate going forward will remain at 25%.
As at the reporting date, the Group has unused tax losses of £10,900,000 (2019: £10,259,000) available for offset against future profits generated
in the UK. No deferred tax asset has been recognised in respect of these losses due to the uncertainty of its recoverability.
The tax charge of the Group is driven by tax paid on the profits of Biokosmes S.r.l and Nelie BV, offset by the release of deferred tax liabilities
generated on the acquisition of Biokosmes, Periproducts and Dentyl businesses. In 2020 the effective tax rate of Biokosmes was 17% (2019: 22%)
and the effective tax rate of Nelie BV was 22% (2019: 23%).
11. Deferred tax
Deferred taxes arising from temporary differences are summarised as follows:
Movements
At Arising upon attributed At
1 January Recognised in acquisitions to foreign 31 December
2020 profit and loss in the year exchange 2020
Deferred tax liabilities/(assets) £’000 £’000 £’000 £’000 £’000
Purchased goodwill 56 (15) - 10 51
Other intangibles (473) 91 (277) (24) (683)
Inventories (41) (11) - (12) (64)
Trade and other receivables 37 2 - 10 49
Deferred tax liability (421) 67 (277) (16) (647)
Venture Life group plc and its wholly owned UK subsidiaries have applied the tax consolidation legislation, which means that these entities are
taxed as a single entity. As a consequence, the deferred tax assets and deferred tax liabilities of these entities have been offset in the consolidated
financial statements.
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12. Earnings per share
A reconciliation of the weighted average number of ordinary shares used in the measures is given below:
Year ended Year ended
31 December 31 December
2020 2019
Number Number
For basic EPS calculation 86,402,007 83,712,106
For diluted EPS calculation 93,416,888 89,254,313
The dilution reflects the inclusion of the options and LTIPs that have been issued, amounting to 6,460,766 stock options and 554,115 LTIPs per Note 23.
A reconciliation of the earnings used in the different measures is given below:
£’000 £’000
For basic and diluted EPS calculation 2,368 904
Add back: amortisation 909 579
Add back: exceptional costs 167 208
Add back: share based payments 409 131
For adjusted EPS calculation 1 3,853 1,822
1 Adjusted EPS is profit after tax excluding amortisation, exceptional costs and share-based payments.
The resulting EPS measures are:
Pence Pence
Basic EPS calculation 2.74 1.08
Diluted EPS calculation 2.53 1.01
Adjusted EPS calculation 1 4.46 2.18
Adjusted diluted EPS calculation 4.12 2.04
1 Adjusted EPS is profit after tax excluding amortisation, exceptional costs and share-based payments.
13. Dividends
Amounts recognised as distributions to equity holders in the period:
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Final dividend - -
The parent entity does not have distributable reserves and accordingly the Directors are not in a position to recommend the payment of a dividend
in 2020 (2019: £nil pence per share).
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
14. Business combinations
On 24 January 2020 the Company completed the acquisition of 100% of the equity instruments of Nelie BV and wholly-owned subsidiaries
PharmaSource BV and MD Manufacturing BV, a group of companies based in the Netherlands engaged in the supply of anti-fungal and related
products to European customers and trading under the name of “PharmaSource”. The acquisition consideration was €6.5 million, comprising
€0.25 million net working capital at completion, €1.7 million in intangible assets (principally customer relationships, distribution agreements and
trademarks), €0.3 million deferred tax provision and a balance of €4.8 million as goodwill. The magnitude of the goodwill reflects the future value
that the Group can unlock from this business acquisition through (a.) the trading of these acquired products into its network of existing Venture Life
Brand customers, (b.) value creation through the transitioning of manufacturing in-house and (c.) value creation through the application of the Group’
internal R&D resources to broaden the product range. The acquisition consideration of €6.5 million was paid entirely in cash of which €5.3 million
was paid at completion, €1.0m within 45 days of completion and the balance of €0.5 million within 270 days of completion. The acquisition was
funded through the Company’s own resources.
PharmaSource products are anti-fungal in nature and feature a unique trademark protected delivery system in the form of a pen. The Group
acquired the business to expand its portfolio into anti-fungal products and to broaden its customer base, especially across Europe. The inclusion
of this additional business into its portfolio increased the leverage of its trading infrastructure and contributed to the overall improvement in
profitability. The acquisition has been accounted for under IFRS 3 as a business combination. The Consolidated Financial Statements to 2020
include the results of the PharmaSource business for the period from 24 January 2020 to 31 December 2020.
The fair values of the identifiable assets and liabilities of the PharmaSource business as at the date of acquisition were:
Fair Value Fair Value
€’000 £’000
Assets
Non-current assets
Customer relationships * 551 465
Distribution agreements * 682 575
Trademarks * 494 417
Current assets
Inventories 314 265
Trade and other receivables 189 159
Cash and cash equivalents 319 269
Total assets 2,549 2,150
Current liabilities
Trade and other payables 257 215
Non-current Liabilities
Deferred tax 328 277
Total net assets 1,964 1,658
Net assets acquired 1,964 1,658
Goodwill 4,831 4,076
Total consideration 6,795 5,734
Satisfied by
Cash paid at completion 5,294 4,467
Cash paid within 45 days of completion 976 822
Cash to be paid within 270 days of completion 525 445
Total consideration 6,795 5,734
*
Intangible assets identified as part of the PharmaSource BV acquisition. See note 3.10 for further details.
Revenue and profit impact of the acquisition
PharmaSource was acquired on 24 January 2020. It generated net revenues of £2.8 million and operating profit before exceptional items
of £0.9 million in the period from 24 January 2020 to 31 December 2020. Had the business been acquired from 1 January 2020 it would
have contributed £2.8 million in net revenues and operating profit before exceptional items of £0.9 million.
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15. Intangible assets
Other
Development Patents and intangible
costs Brands trademarks Goodwill assets Total
£’000 £’000 £’000 £’000 £’000 £’000
Cost or valuation:
At 1 January 2019, as previously reported 2,712 1,089 996 16,233 2,819 23,849
Prior period adjustment* (32) - (5) 629 128 720
Restated at 1 January 2019 2,680 1,089 991 16,862 2,947 24,569
Additions 872 - 106 - - 978
Disposals (147) - - - (147)
Foreign exchange movements (125) - (81) (445) (91) (742)
At 1 January 2020 (restated*) 3,280 1,089 1,016 16,417 2,856 24,658
Acquired through business combinations - - 417 4,076 1,040 5,533
Additions 739 - 82 - - 821
Disposals (345) - (182) - - (527)
Foreign exchange movements 170 - 41 784 174 1,169
At 31 December 2020 3,844 1,089 1,374 21,277 4,070 31,654
Amortisation:
At 1 January 2019, as previously reported 1,223 - 662 - 1,423 3,307
Prior period adjustment* 27 - (56) - 82 53
Restated at 1 January 2019 1,250 - 606 - 1,505 3,361
Charge for the year 246 - 178 - 155 579
Foreign exchange movements (58) - (81) - (57) (196)
At 1 January 2020 (restated*) 1,438 - 703 - 1,603 3,744
Charge for the year 323 - 213 - 373 909
Disposals - - (182) - - (182)
Foreign exchange movements 76 - 6 - 77 159
At 31 December 2020 1,837 - 740 - 2,053 4,630
Carrying amount:
At 31 December 2019 1,842 1,089 313 16,417 1,253 20,914
At 31 December 2020 2,007 1,089 634 21,277 2,017 27,024
*
see notes 3.4 b) and 32 for more information on the prior period adjustment.
All Capitalised development costs are amortised over their estimated useful lives, which is five years. All amortisation has been charged to
administrative expenses in the Statement of Comprehensive Income.
Other intangible assets currently comprise customer relationships and product formulations acquired through the acquisition of Biokosmes S.r.l.
and customer relationships acquired through the acquisitions of Periproducts, the Dentyl brand and the PharmaSource group. These assets were
recognised at their fair value at the date of acquisition and were being amortised over a period of between five and ten years. The weighted average
remaining amortisation period for other intangible assets is 5.0 years (2019: 4.4 years)
Assets with indefinite economic lives as well as associated assets with finite economic lives are tested for impairment at least annually
or more frequently if there are indicators that amounts might be impaired. The impairment review involves determining the recoverable
amount of the relevant cash-generating unit, which corresponds to the higher of the fair value less costs to sell or its value in use.
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
15. Intangible assets continued
The key assumptions used in relation to the Biokosmes (Customer Brands CGU), Periproducts, the Dentyl brand and PharmaSource group
(part of the Venture Life Brands CGU) impairment review are as follows:
• The estimates of profit before tax for the three years to 31 December 2023 are based on management forecasts of the Biokosmes,
Periproducts, the Dentyl brand and PharmaSource group businesses, with subsequent years growth forecasted at -2-3%, 0-2% and 0-1%
respectively. Management consider 2-3%, 0-2% and 0-1% conservative growth rates for these businesses, but reflective of the operating
sectors of the businesses. During 2020, Biokosmes net sales growth was in excess of 10% due to broad organic growth, Periproduct’s main
asset (UltraDEX) net sales declined by 4% partly due to the consequence of COVID-19 lockdown in the UK oral care market, the Dentyl brand
grew by 80% due to development of sales to China and the full-year Pharmsource group net sales grew by 20% due to broad organic growth.
• The Group has applied a discount rate to the future cash flows of Biokosmes for five years, with a terminal value reflecting future years. The rate
is based upon the Group WACC of 12.4% and adjusted for specific segment, country and currency risk and then converted onto a pre-tax basis.
The resulting rate is relatively high and is derived from CAPM theory based upon a relatively high equity risk premium applied to a low-geared
Company. These assumptions generate a significant headroom over the assets of the business held at the balance sheet date. The Biokosmes
factory has remained open throughout 2020 and in the current year-to-date and has not been impacted by COVID-19 despite the country
undergoing periods of regional and national lockdown.
• The Group has applied a discount rate to the future cash flows of Periproducts Ltd, the Dentyl brand and the PharmaSource group for five years
including a terminal value. The rate is based upon the Group WACC of 12.4% and adjusted for specific segment, country and currency risk and
then converted onto a pre-tax basis. These assumptions generate a significant headroom over the assets of the business held at the balance
sheet date.
• These above impairment assessments of Biokosmes S.r.l, Periproducts Ltd, the Dentyl brand and the PharmaSource group have included
assessment of all elements of intangible value regardless of whether their economic lives are finite or indefinite, and include Customer
Relationships, acquired formulations, acquired Trademarks and Goodwill.
Intangible assets with indefinite useful lives allocated to operating segments
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Restated
Goodwill Periproducts Ltd 3,337 3,337
Dentyl 3,100 3,100
PharmaSource BV 4,340 -
Venture Life Brands Total 10,777 6,437
Biokosmes S.r.l (restated *) 10,500 9,980
Customer Brands Total 10,500 9,980
Total 21,277 16,417
Brands Periproducts Ltd - -
Dentyl 1,089 1,089
PharmaSource BV - -
Venture Life Brands Total 1,089 1,089
Biokosmes S.r.l - -
Customer Brands Total - -
Total 1,089 1,089
*
see notes 3.4 b) and 32 for more information on the prior period adjustment.
The recoverable amount of each segment was determined based on value-in-use calculations, covering a detailed three-year forecast, followed
by an extrapolation of expected cash flows for the remaining useful lives using a declining growth rate determined by management. The present
value of the expected cash flows of each segment is determined by applying a suitable discount rate reflecting current market assessments
of the time value of money and risks specific to the segment.
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Recoverable amount of each operating segment
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Periproducts Ltd 6,290 6,130
Dentyl 5,930 5,175
PharmaSource BV 8,659 -
Venture Life Brands Total 20,879 11,305
Biokosmes S.r.l 13,691 21,476
Customer Brands 13,691 21,476
These assumptions are subjective and provide key sources of estimation uncertainty, specifically in relation to growth assumptions, future
cashflows and the determination of discount rates. The actual results may vary and accordingly may cause adjustments to the Group’s valuation in
future financial years. Sensitivity analysis has been performed on the impairment review and indicate sufficient headroom in the event of reasonably
possible changes in key assumptions are unlikely to result in an impairment for intangibles.
16. Property, plant and equipment
Plant and Other Right-of-use
equipment equipment assets Total
£’000 £’000 £’000 £’000
Cost or valuation:
At 1 January 2019 2,317 97 4,126 6,540
Additions 388 - 137 525
Disposals - - - -
Foreign exchange movements - - - -
At 1 January 2020 2,705 97 4,263 7,065
Additions 1,213 35 2,510 3,758
Disposals * (4) (4) (351) (359)
Foreign exchange movements (212) 105 63 (44)
At 31 December 2020 3,702 233 6,485 10,420
Depreciation:
At 1 January 2019 866 89 994 1,949
Charge for the year 230 2 554 786
Disposals - - - -
Foreign exchange movements 78 - 100 178
At 1 January 2020 1,174 91 1,648 2,913
Charge for the year 331 26 724 1,081
Disposals * (4) (4) (351) (359)
Foreign exchange movements (198) 21 (56) (233)
At 31 December 2020 1,303 134 1,965 3,402
Carrying amount:
At 31 December 2019 1,531 6 2,615 4,152
At 31 December 2020 2,399 99 4,520 7,018
* The disposal of RoU assets represents the expiry of a lease on a logistics facility at 31 December 2020. The group entered into a new 3 year lease agreement in relation to this facility
from 1 January 2021 which comprises a commitment of £760,000.
All depreciation has been charged to administrative expenses in the Statement of Comprehensive Income.
Additions to right-of-use asset category reflect the recognition of the Group’s leasing obligations under IFRS 16. Further details are included in Note 28.
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
17. Inventories
At At
31 December 31 December
2020 2019
£’000 £’000
Raw materials 5.330 3,490
Finished goods 3,556 1,592
Total 8,886 5,082
An amount of £17,229,000 (2019: £12,203,000) was recognised in respect of expenditure on inventory in the Statement of Comprehensive
Income within Cost of Sales.
18. Trade and other receivables
At At
31 December 31 December
2020 2019
£’000 £’000
Trade receivables 6,709 5,985
Prepayments and accrued income 311 100
Other receivables 633 278
Total 7,653 6,363
Contractual payment terms with the Group’s customers are typically 60-90 days.
The aging analysis of trade receivables that are past due is as follows:
At At
31 December 31 December
2020 2019
£’000 £’000
31 to 60 days past due 177 183
60 to 90 days past due 175 26
90 to 120 days past due - 155
>120 days past due 899 119
Overdue trade receivables gross 1,251 483
Allowance for credit losses (516) (111)
Trade receivables – net 735 372
The Directors consider that the carrying value of trade and other receivables represents their fair value.
In determining the recoverability of trade receivables, the Group considers any change in the credit quality of the receivable from the date credit
was granted up to the reporting date. For details on the Group’s credit risk management policies, refer to Note 29(d). The Group has adopted IFRS9
to trade receivables and considered the recoverability of amounts owing from its customers by applying the simplified model for expected credit
losses to trade receivables to measure the loss allowance at an amount equal to lifetime expected credit losses.
The Group’s expected credit loss model uses the Standard & Poors sovereign credit default ratings as an indication of the likelihood of default by
customers in each territory, Judgements are then applied to translate these ratings into probabilities of default, which are then compounded on a
sliding scale with aging. £300 of this increase arises from the inclusion of the trade receivables within the PharmaSource group.
The Group does not hold any collateral as security for its trade and other receivables. The amounts of trade and other receivables denominated
in currencies other than pounds sterling are shown in Note 29(c). The Directors further considered the carrying value of overdue trade and other
receivables in the light of the on-going COVID-19 situation. Settlements since 31 December 2020 have been robust, with the majority of the
unprovided overdue balance having now been settled and the remaining sum giving no cause for concern.
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19. Cash and cash equivalents
At At
31 December 31 December
2020 2019
£’000 £’000
Available cash and cash equivalents 42,095 5,159
Cash allocated for acquisition of PharmaSource BV post year-end - 5,551
Cash and cash equivalents 42,095 10,710
The Group holds sterling, Chinese renminbi and euro denominated balances in the UK. The Group’s subsidiaries hold US dollar, yen and euro
accounts in Italy, euro accounts in the Netherlands and a Swiss franc account in Switzerland.
The Directors consider that the carrying value of cash and cash equivalents approximates their fair value. For details on the Group’s credit risk
management policies, refer to Note 29(d).
The amounts of cash and cash equivalents denominated in currencies other than pounds sterling are shown in Note 29(c).
20. Share capital and share premium
Share capital
All shares are authorised, issued and fully paid. The Group has one class of ordinary shares which have full voting rights, no preferences
and no restrictions attached.
Ordinary Ordinary
shares of shares of Share Merger
0.3p each 0.3p each premium reserve
Number £ £’000 £’000
At 31 December 2020 125,831,530 377,495 65,738 7,656
At 31 December 2019 83,712,106 251,136 30,824 7,656
The Company issued 42,119,424 new shares during the year for consideration of £36,997,000 (nil new shares issued during 2019).
This issuance included 2,070,674 shares arising from the exercise of staff share options.
The Group operates a Long-Term Incentive Plan. Up to the balance sheet date, there have been four awards under this plan, in which
Executive Directors and senior management of the Group participate. During 2020, one of the awards matured but did not meet vesting
conditions. Further details are included in the Directors’ Remuneration Report set out on pages 36 to 40.
21. Merger reserve
In 2010 the Company acquired 100% of the issued share capital of Venture Life Limited from shareholders of the Company. This combination gave
rise to a merger reserve in the Consolidated Statement of Financial Position, being the difference between the nominal value of new shares issued
by the Company for the acquisition of the shares of the subsidiary and the subsidiary’s own share capital and share premium account.
The merger reserve is also used where more than 90% of the shares in a subsidiary are acquired and the consideration includes the issue of
new shares by the Company, thereby attracting merger relief under the Companies Act 2006. The balance on the reserve of £7,656,000
(2019: £7,656,000) has arisen through the acquisition of Venture Life Limited in 2010 (£50,000), and Biokosmes in March 2014 (£7,606,000).
22. Foreign currency translation reserve
The foreign currency reserve represents unrealised cumulative net gains and losses arising on the translation and consolidation of the Group’s
Italian and Netherlands subsidiaries.
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
23. Share-based payments and share-based payments reserve
23.1 Share options
Share options are held by option holders in either the Venture Life Group plc Enterprise Management Incentive Share Option Plan (“EMI Plan”)
or under the Venture Life Group plc Unapproved Share Option Plan (“Unapproved Plan”). All options in both plans are settled in equity when the
options are exercised.
Options under both Plans vest according to time employed at Venture Life. Additionally, some options granted under the EMI Plan vest according
to achievement of certain non-market performance targets.
The maximum term of options granted under both Plans is ten years.
The share option charge for the year was £409,000 (2019: £131,000) and is included in administrative expenditure in the
Statement of Comprehensive Income.
The share option provision recycling for the year was £373,000 (2019: £115,000) and pertained to a series of successful staff stock
option exercise events coupled with releases in respect of executive LTIP incentives which had failed to meet the vesting conditions.
The following table illustrates the number and weighted average exercise prices (“WAEP”) of, and movements in, share options during the year.
2020 2020 2019 2019
Number WAEP (p) Number WAEP (p)
Total outstanding at beginning of the year 4,067,940 46.1 4,108,940 46.1
Granted during the year 5,060,100 33.8 - -
Exercised (2,070,674) 46.0 - -
Forfeited (596,600) 46.0 (41,000) 47.5
Total outstanding at 31 December 6,460,766 36.5 4,067,940 46.1
Exercisable at 31 December 1,278,666 44.6 3,157,440 45.0
The following table summarises information about the range of exercise prices for share options outstanding at 31 December:
2020 2019
Number Number
Range of exercise prices 0p–49p 6,148,766 3,310,040
50p–99p 312,000 757,900
100p–149p - -
Total 6,460,766 4,067,940
At 31 December 2020, the weighted average remaining contractual life of options exercisable is 7.88 years (2019: 3.22 years).
The weighted average exercise price of options granted in the year was 33.7 pence. No options were granted in the prior year.
The non-market performance conditions for all share options outstanding at 31 December 2020 and which are exercisable
at 31 December 2020 or before have been achieved.
The share-based payment charge has been calculated using the Black-Scholes model to calculate the fair value of the share options that vest
according to non-market performance conditions. An appropriate valuation model has been used to calculate the fair value of share options with
market performance-related vesting. Disclosure of those valuation assumptions is not made on the basis that the related charge is immaterial.
The scheme is equity settled.
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The inputs into the Black-Scholes model for issuance of stock options were as follows for 2020. No issuances were made in 2019:
2020 2019
Weighted average share price (p) 33.7 n/a
Weighted average exercise price (p) 33.7 n/a
Weighted average expected volatility (%) 37.0 n/a
Weighted average expected life (years) 4 n/a
Weighted average risk free rate (%) 0.546 n/a
Expected dividends (%) 0.294 n/a
a) The risk-free rate is based on the UK gilt rate as at the grant date with a period to maturity commensurate with the expected
term of the relevant option tranche.
b) The fair value charge is spread evenly over the period between the grant of the option and the earliest exercise date.
c) The expected volatility is based on the historical volatility of similar companies share prices over the previous three years. The expected life
used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and
behavioural considerations. The range of comparable companies has been reviewed for grants in the current year resulting in the decrease
in expected volatility.
23.2 Long-Term Incentive Plan
The Group operates a Long-Term Incentive Plan. Up to the balance sheet date, there have been four awards under this plan, in which
Executive Directors and senior management of the Group participate.
Awards under the Plan are granted in the form of nominal cost share options, and are to be satisfied either using market-purchased shares or by
the issuing of new shares. The awards vest in full or in part dependent on the satisfaction of specified performance targets at the end of the vesting
period applying to each plan. The number of awards that vest is dependent upon either the earnings per share (“EPS”) achieved for the relevant year
and the Group’s Total Shareholder Return (“TSR”) during the vesting period within a comparator group. Details of the awards made in previous years
that have not yet lapsed are set out below:
Award Four
Grant date of awards 23 March 2018
Grant date fair value of award (pence per award) 46.5
Vesting date of awards 23 March 2021
Maximum number of awards 554,115
Vesting condition based on TSR
Relevant date for determination of vesting conditions 23 March 2021 for TSR
Further details of vesting conditions are set out in the Directors’ Remuneration Report on pages 37 and 38. Regarding awards one, two and three,
the vesting conditions were not met and the awards were forfeited. Award four includes vesting conditions that are market based, and allowance
for these are included within the fair value at grant date. The weighted average fair value of options granted in prior years was determined using the
Monte-Carlo valuation model was 46.5 pence per option. The significant inputs into the model were:
• weighted average share price of 46.5 pence at the grant date
• exercise price shown above
• dividend yield assumed nil for the basis of the calculation
• options are assumed to be exercised at point of vesting
• an annual risk-free interest rate of 0.939%
The volatility measured as the standard deviation of continuously compounded share returns is based on statistical analysis of daily share prices
over the last three years.
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
23. Share-based payments and share-based payments reserve continued
23.2 Long-Term Incentive Plan continued
Movements in the number of awards outstanding, assuming maximum achievement of vesting conditions, are as follows:
2020 2019
Number Number
At 1 January 1,474,267 2,672,009
Granted - -
Did not meet vesting conditions (920,152) (781,642)
Forfeited - (416,100)
At 31 December 554,115 1,474,267
Please refer to Note 7 for disclosure of the charge to the Consolidated Statement of Comprehensive Income arising from share-based payments.
The share-based payment reserve represents cumulative charges made to the Consolidated Statement of Comprehensive income in respect of
share-based payments under the Group’s share option schemes. Where vesting conditions are not met, the associated element of share-based
payment reserve is released and recycled into retained earnings.
24. Retained earnings
Retained earnings represents all other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere.
25. Trade and other payables
At At
31 December 31 December
2020 2019
£’000 £’000
Trade payables 4,004 4,027
Accruals and deferred income 2,003 727
Social security and other taxes 846 600
Other payables 255 137
Total 7,108 5,491
Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs. They are non-interest-bearing
and are normally settled on 30 - 90 day terms.
The Directors consider that the carrying value of trade and other payables approximates their fair value.
The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe and no interest has been
charged by any suppliers as a result of late payment of invoices during the year.
The amount of trade and other payables denominated in currencies other than pounds sterling are shown in Note 29(c).
26. Interest-bearing borrowings
At At
31 December 31 December
2020 2019
£’000 £’000
Current
Invoice financing 888 1,184
Leasing obligations 477 512
Unsecured bank loans due within one year 1,092 738
Total 2,457 2,434
Non-current
Leasing obligations 4,085 2,139
Unsecured bank loans due after one year 4,636 2,452
Total 8,721 4,591
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All bank loans are held by the Group’s Italian subsidiaries. During 2020 three new bank loans in the amount of €3.5 million were secured from
BPM SPA and Unicredito with expiry dates of June 2025, November 2025 and June 2026 respectively. Invoice financing includes the Italian RiBa
(or “Ricevuta Bancaria”) facility which is a short-term facility. The balance shown above of £888,000 (2019: £1,184,000) reflects the amount that had
been settled in Biokosmes’s account under RiBa and drawn against invoices in the UK as at the reporting date.
All of the above bank loans and the RiBa invoice financing balance bear interest at variable rates.
A summary showing the utilisation of this invoice financing is shown below:
2020 2019
£’000 £’000
Opening balance at 1st January 1,184 1,240
Drawdown 2,314 3,083
Repayments (2,668) (3,088)
Impact of foreign exchange 58 (51)
Closing balance at 31st December 888 1,184
A summary showing the contractual repayment of interest-bearing borrowings is shown below:
At 31 December 2020 At 31 December 2019
Leasing Leasing
obligations Other 2020 obligations Other 2019
£’000 £’000 £’000 £’000 £’000 £’000
Amounts and timing of debt repayable
Within 1 year 523 2,052 2,575 523 1,974 2,497
1-2 years 473 1,508 1,981 491 766 1,257
2-3 years 447 1,352 1,799 444 757 1,201
3-4 years 448 1,167 1,615 422 644 1,066
4-5 years 447 638 1,085 422 463 885
After more than 5 years 2,471 90 2,561 414 7 421
Total 4,809 6,807 11,616 2,716 4,611 7,327
The above amounts reflect the contractual undiscounted cash flows, which may differ to the carrying values of the liabilities at the reporting date.
Net debt reconciliation
Liabilities from financing activities Other assets
Net Cash /
Borrowings Leases Sub-total Cash (Net Debt)
Net cash at 1 January 2019 3,842 3,226 7,068 9,623 2,555
Net cashflow - - - 1,406 1,406
Finance lease repayments - (585) (585) - 585
Drawdown 3,784 - 3,784 - (3,784)
(Repayments) (3,088) - (3,088) - 3,088
Foreign exchange movements (164) 10 (154) (319) (165)
Net cash at 31 December 2019 4,374 2,651 7,025 10,710 3,685
Net cashflow - - - 31,443 31,443
Finance lease repayments - (764) (764) - 764
Interest on leases - 33 33 (33)
Drawdown 5,428 2,510 7,938 - (7,938)
(Repayments) (3,433) - (3,433) - 3,433
Foreign exchange movements 247 132 379 (58) (437)
Net cash at 31 December 2020 6,616 4,562 11,178 42,095 30,917
Lease liability
In 2017 the Group adopted IFRS 16, which means that lease contracts that have previously been recognised as operating leases are now
being recognised as finance leases. In the Statements of Financial Position, additional lease liabilities at 31 December 2020 of £4,562,000
(2019: £2,651,000) and right-of-use assets of £4,520,000 (2019: £2,615,000) are recognised, giving a net liability position of £42,000
(2019: £36,000).
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
27. Statutory employment provision
The statutory employment provision includes the liability for severance indemnities related to employees of the Group’s Italian subsidiary.
The severance indemnity liability arises under Italian law and is calculated with reference to each employee’s length of service, employment category
and remuneration. There is no vesting period or funding requirement associated with the liability. The liability recorded at the reporting date is based
on the aggregate amount that the employees of the Group’s Italian subsidiary would be entitled to on termination of employment for whatever
reason. The timing of utilisation of this provision is uncertain.
At At
31 December 31 December
2020 2019
£’000 £’000
At 1 January 1,058 1,062
Additional provisions 236 216
Amount utilised (149) (137)
Foreign exchange movements 56 (83)
At 31 December 1,201 1,058
28. Leases
During 2017 the Group early adopted IFRS 16 “Leases”, which was applied from 1 January 2017.
IFRS 16 requires the Group, with the exception of short-term and low value leases, to value all leasing obligations disclosing right-for-use assets
and corresponding lease liabilities. As detailed below, all leases of the Group have been considered to have balance sheet leasing obligations with
the exception of a UK property lease which expired within 2017.
Right-of-use assets
Office Motor
equipment vehicles Property Total
£’000 £’000 £’000 £’000
Carrying value 1 January 2019 33 - 3,099 3,132
Additions - - 137 137
Depreciation charge in the year (15) - (539) (554)
Foreign exchange movements - - (100) (100)
Carrying value 31 December 2019 18 - 2,597 2,615
Interest charge in the year - - 38 38
Cash outflow for leases in the year 15 - 570 585
Carrying value 1 January 2020 18 - 2,597 2,615
Additions - 17 2,493 2,510
Depreciation charge in the year (13) (7) (704) (724)
Foreign exchange movements (2) (1) 122 119
Carrying value 31 December 2020 3 9 4,508 4,520
Interest charge in the year - - 33 33
Cash outflow for leases in the year 14 6 744 764
Lease liabilities were calculated as the present value of the future lease obligations of the Group amounting to £4.56 million (31 December 2019:
£2.65 million). The future leasing obligations were discounted using the relevant Italian and UK local borrowing rates of 1% and 5% respectively.
The closing lease liability is shown in note 26.
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The lease categories of the Group are made up of:
Office equipment
• Photocopiers and laboratory equipment leased by the Group in Italy and the UK are rented under contract with lease terms extending between
2021 and 2022. Each contract comes with a three-month break clause, but management do not expect that these break clauses will be exercised.
Motor vehicles
• A company car was provided during 2020 for use by a senior member of staff whose responsibilities require a high degree of national
and international road travel.
Property
• The Group’s Italian subsidiary has one operating location and one logistics facility in Lombardy, near to Milan. The operating location has 2 long-
term rental agreements. The main agreement was renewed in November 2019 for a period of six years and has an option to extend the lease for
a further 6 years, which the group expects to exercise, and has accounted for as an addition to right-of-use assets in 2020. The lease on the
logistics facility expired on 31 December 2020. The group entered into a new lease agreement in relation to this facility in December 2020 to
commence on 1 January 2021 for a period of 3 years.
• The Group’s current UK operation is headquartered in a leased premises in Bracknell. The lease contract commenced in August 2017
and expires in July 2022.
At transition IFRS 16 permits the cumulative effect of adopting the standard to be taken to retained earnings. The Group also elected to value
the right-of-use assets in line with lease liabilities at transition. There were no movements taken to retained earnings as a result of transition.
The contractual maturity of lease liabilities is shown in note 26.
If IFRS 16 was not required, operating profit of the Group for the year would be reduced by £40,000 (2019: £31,000) and profit before tax would
be increased by £6,000 (2019: increase £7,000).
29. Financial instruments
The Group is exposed to the risks that arise from its use of financial instruments. This note describes the objectives, policies and processes
of the Group for managing those risks and the methods used to measure them.
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a) Principal financial instruments
The principal financial instruments used by the Group from which financial instrument risk arises are as follows:
• Trade and other receivables (excluding prepayments)
• Cash and cash equivalents
• Trade and other payables (excluding deferred revenue)
•
• Leasing obligations
Invoice financing
•
Interest-bearing debt
Set out below are details of financial instruments held by the Group as at:
31 December 2020 31 December 2019
Financial Financial
assets at Total assets at Total
amortised financial amortised financial
cost assets cost assets
£’000 £’000 £’000 £’000
Financial assets:
Trade and other receivables 1 7,342 7,390 6,263 6,263
Cash and cash equivalents 42,095 42,095 10,710 10,710
Total 49,437 49,485 16,973 16,973
1 Trade and other receivables excludes prepayments
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
29. Financial instruments continued
a) Principal financial instruments continued
31 December 2020 31 December 2019
Liabilities Total Liabilities Total
(amortised financial (amortised financial
cost) liabilities cost) liabilities
£’000 £’000 £’000 £’000
Financial liabilities:
Trade and other payables 2 6,875 6,875 4,164 4,164
Leasing obligations 4,562 4,562 2,651 2,651
Convertible bond - - - -
Vendor loan note - - - -
Interest-bearing debt 6,616 6,616 4,374 4,374
Total 18,053 18,053 11,189 11,189
2 Trade and other payables excludes deferred revenue
During 2017 the Group adopted the lease accounting standard IFRS 16. The standard requires the recognition of leasing obligations which
are included above. See Note 28 for further details.
b) Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk of foreign exchange fluctuations, credit risk and liquidity risk. The Group’s
overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the
Group’s financial performance. The Group’s policies for financial risk management are outlined in the section on Principal Risks and Uncertainties
in the Strategic Report on pages 20 and 21.
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c) Market risk
Foreign exchange risk
The Group is exposed to foreign exchange risk on sales, purchases, and translation of assets and liabilities that are in a currency other than the
functional currency of its operating units.
The carrying amount of the Group’s foreign currency denominated monetary assets and liabilities in euros, US dollars, Chinese renminbi and
Swiss francs are shown below in the Group’s presentational currency, (£).
US$ RMB CHF Euro Total
£’000 £’000 £’000 £’000 £’000
At 31 December 2020
Assets
Trade and other receivables - - - 5,721 5,721
Cash and cash equivalents - 65 4 3,361 3,430
- 65 4 9,082 9,151
Liabilities
Trade and other payables - - - 5,180 5,180
Interest-bearing debt - - - 6,616 6,616
- - - 11,796 11,796
US$ RMB CHF Euro Total
£’000 £’000 £’000 £’000 £’000
At 31 December 2019
Assets
Trade and other receivables - - - 5,444 5,444
Cash and cash equivalents - - 13 6,015 6,028
- - 13 11,459 11,472
Liabilities
Trade and other payables - - - 4,210 4,210
Interest-bearing debt - - - 4,374 4,374
- - - 8,584 8,584
The following table details the Group’s sensitivity to a 10% increase and decrease in the foreign currencies used by the Group against sterling.
10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s
assessment of the reasonable possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency
denominated monetary items and adjusts their translation at the period end for a 10% weakening or strengthening of the foreign currencies
against sterling.
£ currency £ currency
impact impact
strengthening weakening
£’000 £’000
At 31 December 2020
Assets 909 (909)
Liabilities (1,180) 1,180
At 31 December 2019
Assets 1,275 (1,043)
Liabilities (954) 780
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
29. Financial instruments continued
d) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations,
and arises principally from the Group’s receivables from customers and deposits with financial institutions. The Group’s exposure to credit risk
is influenced mainly by the individual characteristics of each customer. The Group has an established credit policy under which each new customer
is analysed for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. The Group’s review includes
external ratings, and in some cases bank references.
The Group applies the IFRS 9 simplified model of recognising lifetime expected credit losses for all trade receivables as these items do not have
a significant financing component. In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess
shared credit risk characteristics. They have been grouped based on the days past due and also according to the geographical location of customers.
The Group gives careful consideration to which organisations it uses for its banking services in order to minimise credit risk. At the previous
reporting date, the Group had a significant concentration of cash held on deposit with certain banks in the United Kingdom. This deposit was
used in part to fund the Dentyl brand acquisition during the year and so the cash concentration is no longer held.
The Group considers its credit risk by counterparty and geography.
At 31 December 2020, the Group was also owed £2,063,000 (2019: £1,045,000) from two (2019: one) of its major customers, the balance being
shown under trade receivables. A provision of £356,000 was made against one of these amounts and included in the group’s bad debt provision.
The carrying amount of financial assets recorded represents the Group’s maximum exposure to credit risk without taking into account the value of
any collateral obtained. In the Directors’ opinion there have been no impairments of financial assets in the periods in this financial information.
No collateral is held by the Group in relation to any of its financial assets.
Interest rate risk
The Group’s principal interest-bearing assets are its cash balances.
The main principles governing the Group’s investment criteria are the security and liquidity of its investments before yield, although the yield
(or return) is also a consideration. The Group will also ensure:
i) that it has sufficient liquidity in its investments. For this purpose it will use its cash flow forecasts for determining the maximum periods for which
funds may prudently be committed; and
ii) that it maintains a policy covering both the categories of investment types in which it will invest, and the criteria for choosing investment counterparties.
The interest rate risk profile of the Group’s financial assets, excluding trade and other receivables, as at 31 December was:
Fixed rate Floating rate Total
2020 2019 2020 2019 2020 2019
£’000 £’000 £’000 £’000 £’000 £’000
Sterling - - 38,665 4,682 38,665 4,682
Euro - - 3,361 6,015 3,361 6,015
RMB - - 65 - 65 -
USD - - - - - -
Swiss franc - - 4 13 4 13
Total - - 42,095 10,710 42,095 10,710
Floating rate deposits in all currencies earn interest at prevailing bank rates.
The interest rate risk profile of the Group’s interest-bearing borrowings, as at 31 December was:
Fixed rate Floating rate Total
2020 2019 2020 2019 2020 2019
£’000 £’000 £’000 £’000 £’000 £’000
Sterling - - 85 145 85 145
Euro - - 11,093 6,880 11,093 6,880
RMB - - - - - -
USD - - - - - -
Swiss franc - - - - - -
Total - - 11,178 7,025 11,178 7,025
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e) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity
is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or damage to the Group’s reputation.
The Directors manage liquidity risk by regularly reviewing the Group’s cash requirements by reference to short-term cash flow forecasts and
medium-term working capital projections prepared by management.
f) Maturity of financial assets and liabilities
All of the Group’s financial assets and financial liabilities at each reporting date are either payable or receivable within one year, with the exception
of the non-current interest-bearing borrowings as detailed in Note 26.
g) Capital management
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders. The Group
is funded by equity, comprising issued capital and retained profits. The capital structure of the Group consists of cash and cash equivalents and
equity, comprising issued capital and retained profits. The Group has no externally imposed capital requirements, but maintains an efficient overall
financing structure while avoiding excessive leverage.
The amounts managed as capital by the Group for the reporting periods under review are summarised as follows:
At At
31 December 31 December
2020 2019
£’000 £’000
Total equity 72,109 33,008
Cash and cash equivalents (42,095) (10,710)
Capital 30,014 22,298
Total equity 72,109 33,008
Borrowings 6,616 4,374
Leasing obligations 4,562 2,651
Overall financing 83,287 40,033
Capital to overall financing ratio 0.36 0.56
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30. Related party transactions
The following transactions were carried out with related parties:
a) Transactions with Directors
Total dividends paid to Directors in the year ending 31 December 2020 were £nil (2019: £nil).
Gianluca Braguti, a Director and shareholder of the Group, was provided with services by the Group totalling £3,460 (2019: £4,389).
At 31 December 2020, Gianluca Braguti owed the Group £4,262 (2019: £5,213).
Under the terms of the Share Purchase Agreement dated 28 November 2013 and signed between the Group and the vendors of Biokosmes,
one of whom was Gianluca Braguti, the vendors agreed to indemnify the Group in full for any net liability arising from certain litigation cases which
had not settled at the time of completion of the acquisition on 27 March 2014. At 31 December 2018 the amount due to the Group under the
indemnity totalled €250,935 of which Gianluca Braguti’s liability was €248,426. During 2019 the final matter was resolved in favour of Biokosmes
in an amount slightly exceeding €250,935 which has accordingly extinguished this indemnified liability. The small net positive surplus was
de-recognised in the statement of financial position at 31 December 2019. During 2020, in order to avoid a remote but potential escalation of
legal action, Biokosmes S.r.l decided to settle with one claimant in the amount of €116.000 which resulted in a net amount owing to the Group
of €102,713. Gianluca Braguti owes to the Group this amount of €102,713 which will be settled in April 2021.
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Financial Statements
Notes to the Consolidated Statements
for the year ended 31 December 2020
30. Related party transactions continued
b) Transactions with other related parties
Braguti’s real estate S.r.l (formerly known as Biokosmes Immobiliare S.r.l), a company 2% owned by Gianluca Braguti, a Director and shareholder of
the Group provided property lease services to Biokosmes S.r.l, the Group’s Italian subsidiary, totalling £409,253 in the year to 31 December 2020
(2019: £403,508). At 31 December 2020, the Group owed Braguti’s real estate S.r.l £68,883 (£94,757 at 31 December 2019).
Services purchased from Biogenico S.r.l, a company 47% owned by Gianluca Braguti, a Director and shareholder of the Group, totalled £32,626
(2019: £2,157). At 31 December 2020, the Group owed Biogenico S.r.l £nil (2019: £2,100). Services provided to Biogenico S.r.l totalled £26,084
(2019: £32,935). At 31 December 2020, Biogenico S.r.l owed the Group £nil (2019: £24,295). Services purchased from A. Erre, a company 10%
owned by Gianluca Braguti, a Director and shareholder of the Group, totalled £64,623 (2019: £74,032) and services provided totalled £222
(2019: £1,970). At 31 December 2020, the Group owed A. Erre £274 (2019: £11,169).
Services purchased from Farmacia San Francesco, a company 10% owned by Gianluca Braguti, a Director and shareholder of the Group,
who is also a Director, totalled £3,393 (2019: £1,863 purchased from Farmacia San Francesco). At 31 December 2020, Farmacia San Francesco
owed the Group £379 (2019: £270). During 2019 Andrew Waters provided professional services to the Company in the period January 2019
to April 2019 to the value of £30,400 prior to his appointment as Chief Financial Officer on 1 May 2019.
31. Post balance sheet events
There were no material events after the balance sheet date.
32. Prior period adjustment
During 2020 the Group made a change to accounting policy in respect of foreign currency translation of Goodwill and fair value adjustments
arising on the acquisition of a foreign entity. The change is to treat Goodwill and fair value adjustments arising on the acquisition of a foreign
entity as assets and liabilities of the foreign entity and translate them into GBP at the closing rate. The previous policy did not account for
these adjustments correctly by treating them as assets and liabilities of the parent and translating them at the historic rate.
See notes 3.4 b) and 15 for further information
The following tables summarise the impacts on the Group’s consolidated financial statements.
a) Consolidated statement of financial position (extract)
At 1 January 2019
Impact of prior period adjustment
As previously
reported Adjustments As restated
£’000 £’000 £’000
Assets
Non-current assets
Intangible assets 20,542 667 21,209
Property, plant and equipment 4,591 - 4,591
25,133 667 25,800
Current assets 20,512 - 20,512
Total assets 45,645 667 46,312
Equity and liabilities
Capital and reserves
Share capital 251 - 251
Share premium account 30,824 - 30,824
Merger reserve 7,656 - 7,656
Foreign currency translation reserve 252 667 919
Share-based payments reserve 609 - 609
Retained earnings (7,512) - (7,512)
Total equity attributable to equity holders of the parent 32,080 667 32,747
Liabilities
Current liabilities 6,779 - 6,779
Non-current liabilities 6,786 - 6,786
Total liabilities 13,565 - 13,565
Total equity and liabilities 45,645 667 46,312
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At 31 December 2019
Impact of prior period adjustment
As previously
reported Adjustments As restated
£’000 £’000 £’000
Assets
Non-current assets
Intangible assets 20,722 192 20,914
Property, plant and equipment 4,152 - 4,152
24,874 192 25,066
Current assets 22,155 - 22,155
Total assets 47,029 192 47,221
Equity and liabilities
Capital and reserves
Share capital 251 - 251
Share premium account 30,824 - 30,824
Merger reserve 7,656 - 7,656
Foreign currency translation reserve (47) 192 145
Share-based payments reserve 624 - 624
Retained earnings (6,492) - (6,492)
Total equity attributable to equity holders of the parent 32,816 192 33,008
Liabilities
Current liabilities 8,143 - 8,143
Non-current liabilities 6,070 - 6,070
Total liabilities 14,213 - 14,213
Total equity and liabilities 47,029 192 47,221
b) Consolidated Statement of Comprehensive Income (extract)
For the year ended 31 December 2019
Impact of prior period adjustment
As previously
reported Adjustments As restated
£’000 £’000 £’000
Profit for the year 904 - 904
Other comprehensive income:
Items that will be reclassified subsequently to profit or loss
Foreign exchange loss on translation of subsidiaries (300) (475) (775)
Total comprehensive profit for the year attributable to equity holders of the parent 604 (475) 129
There is no impact on the Group’s basic or diluted earnings per share and no impact on the total operating, investing or financing cash flows
for the year ended 31 December 2019.
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Financial Statements
Parent Company Balance Sheet
for the year ended 31 December 2020
Company number 05651130
At At
31 December 31 December
2020 2019
Note £’000 £’000
Fixed assets
Investments 5 25,064 19,053
Intangible assets 6, 7 3,977 4,219
29,041 23,272
Current assets
Inventory 170 -
Debtors 8 5,564 9,853
Cash at bank 38,477 4,293
44,211 14,146
Creditors
Amounts falling due within one year 9 (2,844) (2,175)
Net current assets 41,367 11,971
Total assets less current liabilities 70,408 35,243
Creditors
Amounts falling due after one year 10 (1,308) (728)
Net assets 69,100 34,515
Capital and reserves
Called up share capital 11 377 251
Share premium account 65,738 30,824
Merger reserve 7,656 7,656
Foreign currency translation reserve 5 -
Share-based payments reserve 660 624
Profit and loss account (5,336) (4,840)
Shareholders’ funds 69,100 34,515
* As permitted by Section 408(3) of the Companies Act 2006, no profit and loss account of the company is presented. The loss for the financial year dealt with in the financial statements
of the Company is £869,000 (2019: loss £217,000).
The financial statements on pages 86 to 94 were approved and authorised for issue by the Board on 24 March 2021 and signed on its behalf by:
Jerry Randall
Director
24 March 2021
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Parent Company Statement of Changes in Equity
for the year ended 31 December 2020
Foreign
Share currency Share-based
Share premium Merger translation payments Profit and
capital account reserve reserve reserve loss account Total equity
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 January 2019 251 30,824 7,656 - 609 (4,738) 34,602
Loss for the year - - - - - (217) (217)
Total comprehensive expenses - - - - - (217) (217)
Share-based payments charge - - - - 130 - 130
Share-based payments charge recycling - - - - - - -
Transactions with shareholders - - - - 15 115 130
Balance at 31 December 2019 251 30,824 7,656 - 624 (4,840) 34,515
Loss for the year - - - - - (869) (869)
Foreign exchange on translation - - - 5 - - 5
Total comprehensive income / (expenses) - - - 5 - (869) (864)
Share-based payments charge - - - - 409 - 409
Share-based payments charge recycling - - - - (373) 373 -
Contributions of equity, net of transaction costs 126 34,914 - - - - 35,040
Transactions with shareholders 126 34,914 - - 36 373 35,449
Balance at 31 December 2020 377 65,738 7,656 5 660 (5,336) 69,100
During the year the third tranche of the management long-term incentive matured but did not meet its vesting conditions. The respective
accumulated provision within the Share Based Payments reserve of £129,000 was discharged and recycled into retained earnings. In addition
a number of employee stock option contracts were successfully exercised during the year and the respective accumulated provision within the
Share Based Payments reserve of £244,000 was similarly discharged and recycled into retained earnings.
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Financial Statements
Notes to the Parent Company Balance Sheet
for the year ended 31 December 2020
1. Company information
Venture Life Group plc is a publicly traded company on the UK alternative investments market (“AIM”), incorporated in the United Kingdom
whose registered office is at: Venture House, 2 Arlington Square, Downshire Way, Bracknell, Berkshire RG12 1WA. The Company’s principal
place of business is at: 12 The Courtyard, Eastern Road, Bracknell, Berkshire RG12 2XB
The principal activity of the company is the holding of the Group’s share capital and provision of management services to the Group.
2. Accounting convention
These financial statements have been prepared in accordance with applicable United Kingdom accounting standards, including Financial Reporting
Standard 102 – “The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland” (“FRS 102”), and with the Companies
Act 2006. The financial statements have been prepared on the historical cost basis.
Financial Reporting Standard 102 – reduced disclosure exemptions
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted
by the FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”:
•
•
•
•
•
•
•
the requirements of Section 4 Statement of Financial Position paragraph 4.12(a)(iv);
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.39 to 11.48A;
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.29;
the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23; and
the requirements of Section 33 Related Party Disclosures paragraph 33.7.
Going concern
On the basis of the strength of the balance sheet and performance of the business, the Directors are confident that the Company and its Group are
well placed to manage business risks successfully. Accordingly, the Directors continue to adopt the going concern basis in preparing the financial
statements. A summary of how the Directors have considered Going Concern at a Group level and the various scenarios that have been examined
is included in Note 3.1 of the Group Financial Statements.
Investment in subsidiary undertakings and impairment review
Investments in subsidiary undertakings where the Company has control are stated at cost less any provision for impairment. Control is achieved
where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.
Investments are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable.
Impairments are calculated such that the carrying value of the investment is the lower of its cost or recoverable amount. Recoverable amount
is the higher of its net realisable value and its value in use.
Share-based payments
The Company issues equity-settled share-based payments to certain employees and others under which the Group receives services as
consideration for those equity instruments in the Company. Equity-settled share-based payments are measured at fair value at the date of grant by
reference to the fair value of the equity instruments granted. The fair value determined at the grant date of equity-settled share-based payments is
recognised as an expense in the Group’s Statement of Comprehensive Income over the vesting period on a straight-line basis, based on the Group’s
estimate of the number of instruments that will eventually vest with a corresponding adjustment to equity. The expected life used in the valuation is
adjusted, based on management’s best estimate, for the effect of non-transferability, exercise restrictions, and behavioural considerations.
Non-vesting and market vesting conditions are taken into account when estimating the fair value of the awards at grant date. Service and
non-market vesting conditions are taken into account by adjusting the number of share options expected to vest at each reporting date.
When the share options are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction costs
are credited to share capital (nominal value) and share premium.
When an agreement is reached for the settlement of a fixed liability for a fixed number of the Company’s shares (“Fixed for Fixed”) the value of the
liability is de-recognised and is recognised in the share-based payments reserve at the date of the agreement.
When the Company grants options over equity instruments directly to the employees of a subsidiary undertaking, the effect of the share-based
payment, as calculated, is capitalised as part of the investment in the subsidiary as a capital contribution, with a corresponding increase in equity.
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Taxation
Current tax is recognised for the amount of income tax payable in respect of the taxable profit for the current or past reporting periods using
the tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date, except as otherwise indicated. Deferred tax assets are only
recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured at the rates that are expected to apply in the period when the timing differences are expected to reverse, based on the tax
rates and law enacted or substantively enacted at the balance sheet date.
Foreign currency
Assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Transactions in foreign
currencies are recorded at the rate ruling at the date of the transaction. All differences are charged/credited to the profit and loss account.
The company conducts trade in Italy by means of a permanent establishment. This foreign operation operates in a functional currency of euros.
Financial instruments
Financial assets and financial liabilities are recognised in the Company’s Statement of Financial Position when the Company becomes party to the
contractual provisions of the instrument. Financial assets are de-recognised when the contracted rights to the cash flows from the financial asset
expire or when the contracted rights to those assets are transferred.
Financial liabilities are de-recognised when the obligation specified in the contract is discharged, cancelled or expired.
Financial assets
Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method less provision for impairment. Appropriate provisions for estimated irrecoverable amounts are recognised in the profit or loss when there
is objective evidence that the assets are impaired. The amount of the provision is the difference between the carrying amount and the present
value of estimated future cash flows. Interest income is recognised by applying the effective interest rate, except for short-term receivables when
the recognition of interest would be immaterial.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits held on call with banks, and other short-term highly liquid investments
with original maturities of three months or less that are readily convertible to a known amount of cash and are subject to an insignificant risk
of changes in value.
Financial liabilities and equity
Trade and other payables
Trade payables are initially measured at their fair value and are subsequently measured at their amortised cost using the effective interest rate
method; this method allocates interest expense over the relevant period by applying the “effective interest rate” to the carrying amount of the liability.
Judgements: intercompany loan obligations
On the basis of the forecasts prepared by the Group, the Directors are confident that the Company and its Group have sufficient working capital
to honour all of its obligations to creditors as and when they fall due.
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Financial Statements
Notes to the Parent Company Balance Sheet
for the year ended 31 December 2020
3. Profit attributable to members of the parent Company
As permitted by s408 of the Companies Act 2006, the Company’s profit and loss account has not been included in these financial statements.
The loss dealt with in the financial statements of the parent Company was £869,000 (2019: loss £217,000).
The current auditors’ remuneration in respect of audit services provided to the Company is disclosed in Note 7 of the consolidated
financial statements.
4. Employee information
The average number of staff, including Executive Directors, employed by the Company during the year are as shown below:
Year ended Year ended
31 December 31 December
2020 2019
Number Number
Product development and manufacturing - -
Sales and marketing - -
Directors 7 7
Administration - -
Total 7 7
Their aggregate remuneration comprises:
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Wages and salaries 1,299 1,010
Social security costs 174 121
Pension costs 89 96
Other benefits 8 5
Equity settled share-based payments 295 94
Total 1,865 1,326
The aggregate remuneration is charged within the Financial Statements as follows:
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Charged into cost of sales and a proportion absorbed into closing inventory - -
Charged into research and development costs and a proportion into capitalised development costs - -
Charged into operating expenses 1,865 1,326
Total 1,865 1,326
The aggregate remuneration of the key management personnel of the Company (who are all persons with decision making responsibilities
[PDMRs]) comprises:
Year ended Year ended
31 December 31 December
2020 2019
£’000 £’000
Wages and salaries 1,191 901
Social security costs 162 109
Pension costs 89 96
Other benefits 8 5
Equity settled share-based payments 295 94
Total 1,745 1,205
Further information on Directors’ remuneration is included in the Remuneration Report on page 36.
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5. Investments
Capital
Investments in contributions
subsidiary from
undertakings share-based Other
shares payments investments Total
£’000 £’000 £’000 £’000
Cost
At 1 January 2020 18,756 297 31 19,084
Additions 5,824 187 - 6,011
Revaluation adjustment - - - -
At 31 December 2020 24,580 484 31 25,095
Accumulated impairment
At 1 January 2020 - - (31) (31)
Charge for the year - - - -
At 31 December 2020 - - (31) (31)
Net book value
At 31 December 2019 18,756 297 - 19,053
At 31 December 2020 24,580 484 - 25,064
Venture Life Group plc has three UK subsidiary undertakings, Venture Life Limited (Company number 07186207), Lubatti Limited (Company
number 06704099), and Periproducts Limited (Company number 02864374) which are all incorporated in England and registered with the same
address as the Company. It also has one Italian subsidiary (Biokosmes S.r.l, registered address 20122 Milano – Via Besana, 10), one Swiss
subsidiary (PermaPharm AG, registered address Oberallmendstrasse 24, 6304 Zug), one Irish subsidiary (Venture Life Europe Ltd, registered
address Corrig Road, Dublin 18, Ireland) and one Netherlands group, Nelie BV (registered address Hescheweg 94, 5342 CL in Oss, NL) (which
wholly owns PharmaSource BV and MD Manufacturing BV).
Class Proportion
Name of subsidiary of holding held directly Location
Venture Life Limited Ordinary 100% UK
Lubatti Limited Ordinary 100% UK
Periproducts Limited Ordinary 100% UK
PermaPharm AG Ordinary 100% Switzerland
Biokosmes S.r.l Ordinary 100% Italy
Venture Life Europe Ltd Ordinary 100% Ireland
Nelie BV (including two subsidiaries – PharmaSource BV and MD Manufacturing BV) Ordinary 100% Netherlands
6. Intangible assets
Other
intangible
Brands Goodwill assets Total
£’000 £’000 £’000 £’000
Cost or valuation:
At 1 January 2020 1,089 3,272 189 4,550
Additions - - - -
At 31 December 2020 1,089 3,272 189 4,550
Amortisation:
At 1 January 2020 77 232 27 336
Charge for the year 54 164 19 237
At 31 December 2020 131 396 46 573
Carrying amount:
At 31 December 2020 958 2,876 143 3,977
Other intangible assets are amortised over their estimated useful lives, which is between five and ten years. Goodwill and Brands are amortised
over 20 years.
All amortisation has been charged to administrative expenses in the Statement of Comprehensive Income.
Please refer to the impairment review within Note 15 of the Group Financial Statements for more information.
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Financial Statements
Notes to the Parent Company Balance Sheet
for the year ended 31 December 2020
7. Business combinations
On 24 January 2020 the Company completed the acquisition of PharmaSource BV, a group of companies based in the Netherlands engaged
in the supply of antifungal and related products to European customers. The acquisition consideration was €6.7 million, comprising €0.25 million
net working capital at completion, €1.7 million in intangible assets (principally customer relationships, distribution agreements and trademarks),
€0.3 million deferred tax provision, capitalised costs of the acquisition of €0.1 million and a balance of €4.8 million as goodwill. The acquisition
consideration of €6.7 million was paid entirely in cash, of which €5.2 million was paid at completion, €1.0m within 45 days of completion and
the balance of €0.5 million within 270 days of completion. The acquisition was funded through the Company’s own resources.
PharmaSource products are anti-fungal in nature and feature a unique trademark protected delivery system in the form of a pen. The Group
acquired the business to expand its portfolio into anti-fungal products and to broaden its customer base, especially across Europe and China.
The inclusion of this additional business into its portfolio increased the leverage of its trading infrastructure and contributed to the overall
improvement in profitability. The acquisition has been accounted for under IFRS 3 as a business combination. The Consolidated Financial
Statements to 2020 include the results of the PharmaSource business for the period from 24 January 2020 to 31 December 2020.
The fair values of the identifiable assets and liabilities of the PharmaSource business as at the date of acquisition were:
Fair Value Fair Value
€’000 £’000
Assets
Non-current assets
Customer relationships * 551 465
Distribution agreements * 682 575
Trademarks * 494 417
Current assets
Inventories 314 265
Trade and other receivables 189 159
Cash and cash equivalents 319 269
Total assets 2,549 2,150
Current liabilities
Trade and other payables 257 215
Non-current liabilities
Deferred Tax 328 277
Total net assets 1,964 1,658
Net assets acquired 1,964 1,658
Goodwill 4,831 4,076
Total consideration 6,795 5,734
Satisfied by
Cash paid at completion 4,975 4,198
Cash paid within 45 days of completion 976 822
Cash to be paid within 300 days of completion 525 445
Total consideration 6,795 5,734
Transaction costs n/a 90
Total investment n/a 5,824
*
Intangible assets identified as part of the PharmaSource BV acquisition. See note 3.10 of the Group Financial Statements for further details.
Revenue and profit impact of the acquisition
PharmaSource was acquired on 24 January 2020. It generated net revenues of £2.8 million and operating profit before exceptional items
of £0.9 million in the period from 24 January 2020 to 31 December 2020. Had the business been acquired from 1 January 2020 it would
have contributed £2.8 million in net revenues and operating profit before exceptional items of £0.9 million.
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8. Debtors
2020 2019
£’000 £’000
Amounts falling due within one year:
Trade debtors 115 -
Other debtors 66 4
Other taxation - 16
Prepayments and accrued income 72 45
Amounts owed by Group undertakings - -
253 65
Amounts falling due after more than one year:
Amounts owed by Group undertakings 5,311 9,788
Aggregate amounts 5,564 9,853
Amounts owed by Group undertakings
As part of annual impairment review procedures the Directors assessed the recoverability of its loans to Group undertakings based upon
estimates of likely sales and profits from each subsidiary in turn. A Group loan to Venture Life Limited in the amount of £9.8 million was re-assessed
at 31 December 2020 and its impairment was unchanged at £5.5 million resulting in an impairment charge of £nil (2019: £nil) recognised in the
Income Statement in respect of this.
9. Creditors: amounts falling due within one year
2020 2019
£’000 £’000
Trade creditors 226 162
Other taxation and social security costs 192 -
Accruals and deferred income 849 288
Bank loan 257 -
Amounts owed to Group undertakings 1,320 1,716
Other payables - 9
Total 2,844 2,175
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Financial Statements
Notes to the Parent Company Balance Sheet
for the year ended 31 December 2020
10. Creditors: amounts falling due after more than one year
2020 2019
£’000 £’000
Amounts owed to Group undertakings - 511
Bank loan 1,091 -
Deferred tax 217 217
Total 1,308 728
Included in amounts owed to Group undertakings are two loans from Biokosmes S.r.l in the amounts of €0.6 million and €0.7 million (31 December
2019: Two loans totalling €1.9 million). These loans carry interest at 3% and 1.5% respectively and are repayable in instalments to 2021 and 2022.
11. Share capital
2020 2019
£’000 £’000
Allotted, issued and fully paid:
During the year 39,848,451 ordinary shares were issued. At the balance sheet date there were
125,831,530 (2019: 83,712,106) ordinary shares of 0.3 pence each 377 251
The Company has removed the Authorised Share capital from its Memorandum and Articles of Association as allowed by the Companies Act 2006.
12. Post balance sheet events
There were no material events after the balance sheet date.
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Shareholder Information
Company contact details and registered office
Venture House, 2 Arlington Square, Devonshire Way,
Bracknell, Berkshire RG12 1WA.
Incorporated and registered in England and Wales with No. 05651130.
Company Secretary
Giuseppe Gioffrè
Website
Further information on the Group can be found on our website
at www.venture-life.com
Share price information
The latest Venture Life share price can be obtained via a number
of financial information websites.
Venture Life’s London Stock Exchange code is VLG.
Shareholder enquiries
Enquiries concerning shareholdings, change of address
or other particulars, should be directed in the first instance
to the Company’s registrars:
Link Group
The Registry, 10th Floor, Central Square,
29 Wellington Street, Leeds, LS1 4DL
Telephone: +44 (0)371 664 0391
(Calls cost 12p/minute plus network extras. Lines are
open 8.30am-5.30pm Mon-Fri. If calling from outside
the UK please dial: +44 (0)371 664 0391).
Investor relations
Any shareholders with enquiries regarding the Group are welcome
to contact Jerry Randall on +44 (0)1344 578 004.
Alternatively, they can e-mail their enquiry to info@venture-life.com.
Copies of this report are being sent to all shareholders.
Copies are also available at the registered office of the Company,
Venture House, 2 Arlington Square, Devonshire Way,
Bracknell, Berkshire RG12 1WA.
Designed and produced by effektiv
+44 (0)20 7459 4266 / www.effektiv.co.uk
Venture Life Group plc Annual Report & Accounts 2020
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Venture Life Group plc
Venture House, 2 Arlington Square, Devonshire Way,
Bracknell, Berkshire RG12 1WA.
T. +44 (0) 1344 578004
E.
info@venture-life.com
W. www.venture-life.com