InnovaDerma plc (LON:IPD), maker of the hugely successful Skinny Tan bronzer and sculpting range, has unveiled plans to raise £4.4mln to accelerate its expansion.
It is doing so by selling 1.6mln new shares to existing investors at 276p each, which represents a 14% discount to last night’s closing price.
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The company said the cash injection would allow it to invest more aggressively in marketing its range of health and beauty products as well as hire additional talent, particularly in the US and Australia.
The proceeds of the stock placing will also provide the business with additional working capital as it grows.
Trading in line with expectations
In an update on trading, InnovaDerma said: “Since the start of the new financial year, trading remains on budget and in line with the market expectations.
“As the company continues to invest in future growth, this financial year is expected to be significantly second-half weighted.”
Commenting on full-year results last month, chairman Haris Chaudhry said his company’s financial performance had exceeded nearly every benchmark set, propelled by its lead product.
“The strength in our proven international DTC [direct to consumer] platform and retail distribution channels should allow us to replicate the success we are experiencing with Skinny Tan,” he explained.
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InnovaDerma has acquired a number of new brands, including the Stevie K makeup line and Charles + Lee, a men’s skin care range.
At the same time, Skinny Tan is going global with a launch in Korea and a roll out in Regis salons.
In shops and sold direct
The firm has also launched its hair loss/hair care brand Roots both direct and via Superdrug stores.
Skinny Tan is available in Superdrug, and InnovaDerma has products in Boots, GNC, Woolworths, Target and Chemist Warehouse.
Gaining shelf space in these outlets provides third-party validation, and appeases the City, which wants to see the firm’s goods stocked in bricks and mortar establishments.
But the real magic has been woven online with its direct-to-consumer approach. It has become a marketing machine.
In the past if you had the money (it required a big budget) you could dominate Google Adwords and buy web banners and skyscrapers on high traffic sites.
Chairman Chaudhry and his growing team of innovators, which now includes Amy Newman as head of sales and marketing for the UK and Ireland, have eschewed the traditional approach by creating an international brand.
Instead they have used Facebook and Instagram – and they have done so without breaking the bank. “It is about engagement,” said the InnovaDerma chairman in a recent Proactive interview.