("InnovaDerma" or the "Company")
InnovaDerma (LSE: IDP), a UK developer of beauty, personal care and life sciences products, provides a trading update for the six months ended 31 December 2019.
The Company generated revenues of £5.0m, up c.28% compared to the same period last year (H1 2019: £3.9m). The increase in revenue was driven predominantly by Skinny Tan and its performance on the Company's DTC platform and in the UK retail channel. The former has continued to benefit from a revised digital engagement strategy and investment in all three key geographical markets: UK, US and Australia. Product innovation remains key to the business and the first six months included the launch of the limited-edition Choc range in Superdrug, which resulted in exceptional demand and the continued success of Wonder Serum in Boots has provided a strong platform for the season ahead. These initiatives have alleviated the effects of a softer UK high street retail environment and shelf space rationalisation, typical of seasonal products such as Skinny Tan.
The UK DTC channel accounted for 56% of total revenue (H1 2019: 59%). Skinny Tan DTC revenue was supported by Black Friday and Christmas promotions, up c.27% compared to the same period last year. UK retail revenue was almost double that of H1 2019, driven by the Skinny Tan rollout into Boots' stores, an opening order from Tesco, and continued support from Superdrug. Pleasingly, our core brand also made excellent progress in Australia and the US DTC markets, with the introduction of new products. Whilst these two territories remain a small proportion of our overall revenue, growth was robust.
Roots revenues were lower than expected due to competitive shelf positioning, however, new products, particularly Platinum Colour Protect, performed well. Charles + Lee continued to build momentum with Australian retailers and almost doubled revenues compared to last year.
Life Sciences' revenue increased by 71% on the previous year as a result of DTC sales driven by online 'influencers', predominantly in the US.
As in previous years, the Company expects revenue and profit growth to be strongly weighted to H2 FY2020, reflecting the peak tanning season. Skinny Tan remains well positioned to perform well in the UK despite a challenging outlook for the UK retail market. Charles & Lee is growing in popularity, and we look forward to expanding its geographical spread. Roots will receive extra marketing and product development focus to expand its customer base and product offering in 2020.
The momentum of the first half coupled with our forthcoming new category launch give us much confidence for the full year. The balance sheet remains healthy and with an increased retail footprint coupled with continued focus on our DTC channels in core regions, the Company expects to generate strong revenue and profit growth in the second half of the year.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Kieran Callan c/o TB Cardew
+61 (0)3 9863 8030
+44 (0)20 7930 0777
Geoff Nash/ Kate Bannatyne
Alice Lane/Manasa Patil - Corporate Broking
+44 (0)207 220 0500
Shan Shan Willenbrock/Tom Allison
+ 44 (0)20 7930 0777
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