Beauty and personal care products developer, InnovaDerma PLC (LON:IDP) saw its top-line grow strongly in the first half of the current financial year.
With the second half of the financial year encompassing the peak tanning season, and with its recently launched hair loss treatment and hair care brand, Roots Double Effect, selling well, the life sciences company predicted strong growth in revenue and profits in the second half of the financial year.
READ: Skinny Tan maker InnovaDerma to hit the accelerator after £4.4mln City fundraise
Half-year results for the six months to the end of December revealed group revenue grew 31% to £4.2mln from £3.2mln in the corresponding period of 2016, with growth seen in both the direct-to-consumer and retail channels.
Gross profit increased by 20.6% to £2.22mln from £1.84mln but the Skinny Tan maker posted a loss before tax of £32,369, reflecting its investment in people required to support international growth, and pre-launch product development expenses; in the corresponding period of 2016, the pre-tax loss was £153,681.
The group ended 2017 with a cash balance of £2.05mln, up from £210,000 the year before, following a successful fund-raising of £4.4mln.
The group said it has made a strong start to the second half of the year, with the Roots product line experiencing 15% week-on-week growth in revenue on average since mid-December.
While the flagship Skinny Tan product continues to perform well, it looks like the group has another crowd-pleaser in the Roots range that should contribute “a material level of revenue in the current financial year”.
"The board has undertaken a number of strategic initiatives to ensure the business has a strong platform for significant growth in 2018 and beyond, and these are already beginning to bear fruit,” said Haris Chaudhry, the executive chairman of InnovaDerma.
READ: InnovaDerma on course to meet City expectations as Skinny Tan once again blazes a trail
“Our fast-growing product portfolio, improved supply chain and the recent addition of a highly talented and experienced senior management team for key markets are expected to deliver marked improvements across the business. With good momentum behind the key brands and significant orders expected, the board remains confident in meeting market expectations for this financial year,” Chaudhry added.
"I am pleased with the initiatives that we have taken to progress further our core brand Skinny Tan from self-tanning into a beauty brand and in the very successful launch of Roots, both of which are expected to deliver marked improvement in revenues during this half year. We are confident in our immediate and long-term prospects and of emerging as a fast-growing international business with a diverse portfolio in the beauty, life sciences and personal care space," Chaudhry said.
House broker finnCap maintained its 400p price target following results that were in line with last month’s trading update.
“A positive outlook statement, supported by strong post-period end growth data for Skinny Tan and Roots, should provide the comfort that investors are looking for and justify H2 seasonality, which is expected to account for 69% of FY revenues (vs. c.65% in the past two years); driven by product line extensions, increasing retail shelf space and geographic expansion,” the broker said.