Investors

OptiBiotix Health plc (AIM: OPTI), a life sciences business developing compounds to tackle obesity, high cholesterol, diabetes and skin care announces its audited results for the 12 months ended 31 December 2022. The Group’s results reflect its new structure following the listing of ProBiotix Health plc (PBX) on the AQSE Growth Market on 31 March 2022 with its costs and revenues not included in the accounts post listing. This makes meaningful comparisons with previous years difficult.

Highlights

• Admission of ProBiotix Health plc to the AQSE Growth Market on 31 March 2022 raising £2.5m for the further development of our former Probiotic subsidiary and providing OptiBiotix shareholders with a dividend in specie of over £10m
• Launch of LeanBiome® in The Hut Groups (“THG”) impact lean product range and product range extension with a breakfast smoothie with excellent customer reviews
• Launch of GoFigure® products in India with Apollo Hospitals & Pharmacies in September 2022
• Launch of GoFigure® products containing SlimBiome® in China on Tmall.com with over 500 million monthly active users
• Regulatory approval by the Saudi Food & Drug Authority (SFDA) for the sale by our exclusive distributor Nahdi Medical Co (Nahdi) of GoFigure® shakes and bars containing SlimBiome® and subsequent launch in January 2023
• Registration of four new on pack health claims in Australia and New Zealand for SlimBiome® for feelings of fullness, reduction of hunger, and improvement of the gut microbiome and improving digestive health 
• British Retail Consortium accreditation, confirming our compliance with the Global Food Safety Initiative (‘GFSI’) benchmark
• A joint development agreement with Firmenich, the world’s largest privately owned taste and fragrance company, to develop new products containing SweetBiotix®
• Publication of a peer-reviewed scientific study of one of our second-generation SweetBiotix® products, confirming its suitability as a healthy replacement for sugar
• Significant scientific and commercial progress in the development of our microbiome modulators
• No debt with valuable assets in SkinBiotherapeutics and ProBiotix Health providing a strong balance sheet

Post period

• Strong sales growth of own brand products on e-commerce. The listing of SlimBiome® Medical and Gofigure® products on Amazon UK in February 2023, and Slimbiome® Medical on Amazon Germany and Walmart USA in May 2023.  We anticipate further international listings on Amazon throughout 2023 including Amazon India, the Gulf States, and Amazon USA.  This is all part of the internationalisation of our own brand products online
• New orders from both The Hut Group (THG) and Holland & Barrett in the UK
• Three new partners in Asia who have all placed initial orders for SlimBiome®
• Published the results of a third human study on SlimBiome® demonstrating statistically significant benefits to appetite and hunger regulation with a single dose (3g) of SlimBiome®
• Good progress from both partners in the commercial scale up of our second-generation SweetBiotix® family of products and microbiome modulators offering exciting potential for future growth 

The Report & Accounts which will be shortly posted to shareholders contain a Notice of Annual General Meeting (“AGM”) which will be at 11:00am on 26 July 2023 at Walbrook PR Ltd, 75 King William Street, London, EC3V 9HD.  Stephen Hammond and Chris Brinsmead will not put themselves for re-election as directors of the Company and will therefore cease to be directors following the conclusion of the AGM.

Stephen O’Hara, CEO of OptiBiotix Health plc said: “2022 has been a challenging year with high stock levels accumulated from the large amount or orders placed in Q4 2021 by two large partners and low sales in H1 2022 (£118K) caused by the global downturn.  As anticipated, sales improved in H2 (£339k) but were insufficient to make up the H1 deficit with full year revenues from customer contracts of £457K.  A further ten metric tonnes of SlimBiome, approximating to £300k was taken from stock held by distributors for our two largest partners, and not included in these accounts.  Once this stock overhang is clear this should have a material impact on reportable revenue.

“Our focus in 2023 is on looking forward with the aim of each business unit reaching profitability by the end of the year. We believe this can be achieved by a reduction in costs, a focus on existing partners returning to forecast, bringing in new partners particularly in the USA and Asia, and expanding e-commerce channels to reduce partner dependency. With our products winning awards in Europe, Asia, and the USA and an increasing number of large companies like The Hut Group, Holland and Barrett, Apollo Hospitals, and Nahdi Medical using our products, we believe we are in strong position for further growth.

“Despite a challenging 2022 the group has no debt, a strong balance sheet, products with excellent customer reviews, second generation products close to commercialisation, and retains significant exposure to the considerable growth potential of the microbiome through its shareholdings in ProBiotix Health plc and SkinBiotherapeutics plc”. 

Chairman and CEO report

The Group addresses a very large and fast-growing market with a unique portfolio of proven ingredients and finished products.  The year has seen progress in both scientific human studies and regulatory approvals in key international markets demonstrating our products effectiveness and global acceptability.  After strong sales growth through 2019 (£745K), 2020(£1.5m) and 2021 (£2.2m) the Company expanded its team in 2021 including the appointment of CEO, Rene Kamminga to run the prebiotic business, to meet growth demands post Covid but as with many companies in the industry suffered from lower sales in 2022 caused by the global economic uncertainty that followed the Russian invasion of Ukraine. 

This was compounded by the large amount of orders placed in Q4 2021 resulting in high stock levels held by customers accompanied by delays in launching new products and re-ordering due to the global economic down turn in 2022. The Company are pleased that its products have begun to be commercialised by a number of large and well known commercial partners.  Agreements with these partners are time consuming with extensive due diligence and consumer testing prior to launch.  Launch of products with these partners is a significant endorsement of our products which we believe in the absence of recent global economic events (COVID and Ukraine) would have led to strong revenue growth.

Post period the Company has responded to these changes in the external environment by a reduction in costs, a focus on sales and partners delivering to forecast, and building up operational resilience by broadening its partner base and building its ecommerce channels to reduce partner dependency. The Company believes subject to no significant change to the external environment these measures will return the business to the high levels of growth and EBITDA profitability achieved in 2020 and 2021. The Group remains financially robust with no debt, and valuable assets in SkinBiotherapeutics and ProBiotix Health providing a strong balance sheet, with commercialisation of our second-generation technologies affording potential for future growth and shareholder value.

Strategic overview

OptiBiotix Health is a life sciences business founded on the development of prebiotic and probiotic compounds to tackle obesity, cardiovascular disease, diabetes and skincare: all markets offering strong growth potential in every part of the world.  The Company has built a broad portfolio of microbiome assets in this field including prebiotic products like SlimBiome®, WellBiome®, SweetBiotix®, and Microbiome modulators within its core business and skincare through SkinBiotherapeutics and probiotics through ProBiotix Health plc. These create a diverse portfolio of opportunities in an emerging area of healthcare.

The first phase of the Company’s two-stage growth strategy was to establish the credibility of our science and financial sustainability of each business through an initial focus on building sales of our first-generation products (principally SlimBiome® in prebiotics and LP_LDL® in probiotics) though business-to-business deals with partners in multiple territories around the world, starting in Europe, while at the same time pursuing the development of our more innovative second-generation products that offer potentially larger future returns.  This was achieved in 2020 and 2021 with combined revenues of £2.2m and both the Probiotic (now ProBiotix Health plc) and Prebiotic trading businesses being EBITDA profitable in both years and the Group showing a £5.8m profit in 2020 and £6.2m in 2021, albeit largely due to the gain in the value of its investments. 

With SlimBiome® and LP_LDL® winning international awards, gaining excellent customer reviews, and becoming established ingredient brands with a number of key national and international partners in 2019 we started to move towards developing and testing market acceptance of our own label branded products (e.g GoFigure, SlimBiome Medical, and CholBiomeX3) on our online store. The aim was to use the online store as a display window to attract B2B partners and major retailers and assess the potential of selling final products direct to consumers. With positive customer feedback on our own products and more consumers buying online as a result of the COVID pandemic (Mintel, Vitamins and Supplements: Inc Impact of COVID-19 - US, August 2020) a decision was made in 2021 to develop this into a business unit with the appointment of a E-commerce director. This was one of a number of changes made in 2022 to allow the Company to respond to changes in the external environment.  These also included:-

• Gradually moving from ingredient sales to the sale of finished own brand SlimBiome Medical or private label products, both through larger partners and direct-to-consumer through our own online store, Amazon, and other outlets such as Tmall.com in Asia.  This increases margins and reduces partner dependency.
• Shifting the focus from Europe to large partners in key strategic markets, particularly the USA and Asia.  This broadens the partner base and reduces revenue dependency on a small number of partners whilst accessing larger markets with substantially higher sales volumes.
• Expanding our first-generation product portfolio of functional ingredients by extending our technology into new channels such as sports nutrition with LeanBiome® and new product areas such as WellBiome®, and
• Progressing the commercialisation of our second-generation products, SweetBiotix® and Microbiome Modulators.

This was accompanied by a number of new appointments throughout 2022 in marketing, business development in the USA, and e-commerce to support growth of the business. Whilst global economic conditions temporarily impacted on progress during 2022 we believe the changes made in 2022 increase the Company’s resilience to volatility in the external environment and are seeing sales slowly returning to previous forecast levels as market conditions improve.  The other key point is that now we have established the SlimBiome® brand and OptiBiotix’s market credibility customers are starting to place orders without having to go through a complex negotiation process. 

Commercial and scientific overview

Key developments during the financial year and their impact on potential sales growth in 2023 include:

• The achievement in January 2022 of British Retail Consortium accreditation, confirming our compliance with the Global Food Safety Initiative (GFSI) benchmark. This certification by one of the leading international food safety standards, accepted by most large retailers and their suppliers worldwide, is an important support to our commercial strategy of increasing our sales of final product solutions to retail partners and will enhance opportunities in other retail channels both within the UK and international markets.

• Our entry into the sports nutrition market with the launch of LeanBiome®, a patented blend of dietary and prebiotic fibres and a trace mineral, developed to support athletes increase lean muscle mass and to improve metabolism, gut health and satiety. Our distribution agreement with leading e-commerce retailer The Hut Group PLC (“THG”), signed in December 2021, saw LeanBiome® launched in January 2022 in a small number of products including its Impact Diet Lean product as part of its My Protein range in the UK and at the end of H1 2022 a product extension with a breakfast smoothie.  Both products are receiving excellent customer reviews.  High inflation in 2022 led to consumers becoming more price-conscious leading to a trading down of high protein products which reduced the forecast demand for protein powder shakes across the industry and a lower than forecast sales from THG.  With protein prices slowly returning to previous levels we are seeing a gradual return to sales growth in this area.

• Prior to ProBiotix’s separate listing, publication in January 2022 of a third human volunteer study on the clinical efficacy of LP_LDL®, demonstrating through a placebo-controlled trial that LP_LDL® delivered large and statistically significant reductions in total cholesterol, LDL-C (bad) cholesterol and Apolipoprotein B (widely accepted as the most important causal agent of atherosclerotic cardiovascular disease), with no compliance, tolerance or safety issues. The results of this and other studies suggest efficacy similar to low level statins and other treatments more typically associated with pharmaceuticals, suggesting potential in high value pharmaceutical consumer markets for the use of LP_LDL® in individuals who are unwilling or unable to tolerate other treatments.

• Admission of ProBiotix Health plc to the AQSE Growth Market on 31 March 2022, raising £2.5m for the further development of our former Probiotic subsidiary through a placing and subscription of new shares, while giving our own shareholders a dividend in specie of 0.554673 ProBiotix share for every OptiBiotix Health share held. The Group retained a 44% shareholding in ProBiotix Health, valued at circa £11.2m at the end of 2022.  An impairment provision (see note 11) has been made to take account of the reduction in PBX share price from 31^st March 2022 and the release of these accounts.

• Good progress in the development of OptiBiotix Health India.  Its formation has allowed us to reduce the administrative and tax burden of manufacturing and selling ingredients and finished products in India.  We see the lower manufacturing and transport costs with geographical proximity to the countries in the region a driver of future growth in the Asia Pacific region.

• Certification in June 2022 of LeanBiome® as an Informed Ingredient for Sports Nutrition: an important industry certification demonstrating through rigorous independent testing by an authorised body that it is free from substances that are banned in sport. This is a significant step in attracting major sports nutrition companies to incorporate LeanBiome® in their products.

• The appointment in September 2022 of Nutraconnect Pte Ltd, a nutraceutical business growth acceleration service headquartered in Singapore, as a new commercialisation partner for SlimBiome® and LeanBiome® in the Asia Pacific region.  This has led to a number of new partners signing agreements and placing first orders for products in 2023

• The launch in September 2022 of our GoFigure range of weight management products containing SlimBiome® in several pharmacies across India owned by Apollo Hospitals & Pharmacies.  This number has doubled in 2023 with the aim of having products in more than 1000 stores by the end of 2023

• Regulatory approval in October 2022 by the Saudi Food & Drug Authority (SFDA) for the sale by our exclusive distributor Nahdi Medical Co (Nahdi) of GoFigure shakes and bars containing SlimBiome®. This has allowed the launch in January 2023 of the GoFigure range of weight management products through Nahdi’s pharmacy network and e-commerce platform.  The registration process also provides approval in the other five countries that are members of the Gulf Cooperation Council.

• Completion in October 2022 of a systematic review of the scientific literature relating to SlimBiome®, in accordance with the Australia New Zealand Food Standards Code (FSANZ), that enables us to make four new health claims for SlimBiome® on product packaging and in advertising; these relate to feelings of fullness, reduction of hunger, and improvement of the gut microbiome and improving digestive health.  These help us to differentiate SlimBiome® from competitors.

• Launch in late November 2022 of an online shop for GoFigure products containing SlimBiome® on a leading e-commerce platform in China, Tmall.com, allowing us to sell direct to consumers in this huge and growing market.  We are seeing steady sales growth in this market in 2023, particularly of our fruit gummies.

• Publication of a peer-reviewed study (see Prebiotic Potential of a New Sweetener Based on Galactooligosaccharides and Modified Mogrosides - PubMed (nih.gov)) of one of our SweetBiotix® products confirming its sweetness, bulking and prebiotic fibre properties and concluding it could be an innovative, healthy substitute for sugar in a range of everyday products.  Independent scientific confirmation of SweetBiotix® by leading scientists in the field is key to creating interest and industry credibility and provides important marketing materials for commercial launches.

• Significant progress by one of our US partners in the commercial scale production of SweetBiotix®, with final product tested and accepted and now awaiting further structural analysis and formal taste testing to determine the regulatory pathway before progressing to a launch.

• Conclusion of a new joint development agreement, announced in July 2022, with Firmenich, the world’s largest privately owned taste and fragrance company, and one of the world’s largest supplier of Stevia, to develop new products containing our second generation SweetBiotix® compound, in return for sales-based milestone and royalty payments. This agreement with one of the leaders in the field after years of due diligence is a substantial validation of the SweetBiotix science. This continues to progress at pace in 2023.  We believe that the recent scientific publication and the deal with Firmenich, which is merging with DSM, the world’s largest ingredients supplier, to create a NewCo with a US $11.4bn turnover, are major steps forward in bringing SweetBiotix® to market. Firmenich is now making substantial progress in producing SweetBiotix® and in optimising the manufacturing process, and we see significant opportunity here in 2023.

• Significant scientific and commercial progress in the development of our microbiome modulators: a range of second-generation products which selectively enhance the growth rate of specific types of bacteria and create the potential for targeted treatment of a range of human diseases. The manufacturing scale up process was delayed during COVID but completed in late 2022. Structural and functional analysis has been taking place during 2023 to determine novelty and the regulatory pathway.

Results

The Group’s results reflect its new structure following the listing of ProBiotix Health (“PBX”) on the AQSE Growth Market on 31 March 2022.  The timing of the listing means that the accounts include the results of PBX for the three months to the end of March 2022 when it became a plc, after which PBX has been treated as an associate for accounting purposes with its revenues and costs removed and only OptiBiotix’s (44%) proportion of its profit and loss included in the Group’s accounts. This makes comparisons with previous years difficult.

The results show revenue from continuing operations for the year of £457K (2021: combined sales of £2.2m), reflecting both the separate flotation of ProBiotix Health plc and delays in the placement of orders by our new larger partners, which entered the year with substantial stocks from orders placed in late 2021, and then delayed re-ordering because of the global economic uncertainty created by the Russian invasion of Ukraine.

Administrative expenses (excluding non-cash items such as share-based payments and amortisation) were £2.5m (2021: £2.1m), including ProBiotix costs to the end of March and a number of one-off pre-listing and recruitment expenses. This includes a one off  bad debt provision of £492K reflecting a more conservative approach to debtors and stock considering the volatility of the external environment.  We continue to pursue outstanding debtors and believe a proportion of this provision will be recovered in 2023.

The listing of PBX on AQSE materialised a previously unrecognised asset allowing the Group to report a profit of £2.59m largely from the gain on this investment offset by a loss on revaluation of the SkinBioTherapeutics plc (“SBTX”) shares. The Group retains a healthy balance sheet with gross assets of £11.6m (2021: £20.1m) and net cash at the year-end of £1.1m (2021: £2.0m).

Post period end the Group sold 1,211,567 SBTX shares through Cenkos, SBTX’s broker in February 2023 at an average price of 20.4p, generating gross proceeds  of £247K.

The Board senior management and advisers

We have taken decisive action in December 2022 and in 2023 to reflect the separate listing of PBX and reduce Board, management and advisory costs in order to ensure each part of the business and subsequently the Group return to operational profitability as soon as possible.   These actions include:-

• On 28 December 2022 the Company served three months’ notice to terminate the joint brokership of Cenkos Securities plc. Peterhouse Capital Limited continue as the Company’s sole broker.
• Rene Kamminga, who was appointed CEO of OptiBiotix Ltd in March 2021 left the business on 28 February 2023 and Group CEO Stephen O’Hara, who led the ProBiotix business in 2022, resumed the role of CEO of OptiBiotix Ltd.
• All directors volunteered to accept a 20% reduction in their remuneration from 1 January 2023.
• With the departure of Rene  the Company has twice as many non-executive directors as executive directors.  As a result Stephen Hammond and Chris Brinsmead have agreed to step down at the Company’s upcoming Annual General Meeting in July 2023.

We anticipate further restructuring of the board and management team of OptiBiotix as ProBiotix Health plc develops its independence and we reduce the number of senior employees currently shared with ProBiotix Health plc under shared service agreements.

Looking ahead, the focus of the Company will be on investing in areas that offer the highest return.  To support that process and ensure a focus on profitability the Company is developing profit and loss metrics for each part of the business with the aim of each area (USA, India, Ecommerce, B2B) reaching operational profitability, at least on a monthly basis by the end of the calendar year.

Outlook

Our focus in 2023 is on looking forward and moving the Company to operational profitability. We believe we will achieve this by a reduction in central costs and by the promotion of sales, both direct to consumers via ecommerce channels and through our existing partners delivering on forecasts and bringing in new customers, particularly in the USA and Asian markets. There has been progress in each of these areas as outlined below which highlights some of the changes made since the beginning of 2023 year and provides a progress update on each of the business units.  In the first part of 2023 we have:- 

• Invested significantly in new e-commerce channels, including Amazon in the UK, and Walmart in the USA, as well Tmall.com in China.  This has led to rapid sales growth (see E-commerce report) which with continued investment we anticipate will continue throughout 2023 and beyond.

• Shifted our commercial focus to selling SlimBiome® Medical sachets in Europe and SlimBiome shots in India and the Gulf states.  These are designed to be consumed before meals and help users manage their weight by making consumers feel fuller for longer and reducing cravings for sweet and savoury snacks. This is a highly differentiated product which leverages growing market interest in injectable appetite control drugs like semaglutide.   SlimBiome® Medical can be used with any weight management plan or calorie restriction plan and complements rather than competes in a crowded marketplace.  The product enjoys high margins and became a top-selling line on Amazon UK in 2023.

• Re-engaged with major partners that underperformed against our sales expectations in 2022, leading to:
  • A significant new investment in marketing by Optipharm in Australia, coupled with the launch online of their Optislim and Optiman ranges containing our OptiBiome prebiotic fibre;
  • New orders from both The Hut Group and Holland & Barrett in the UK and
  • A substantial increase in the number of Apollo pharmacies and Holland and Barret shops in India selling GoFigure products accompanied by a launch of products on Amazon India on 16^th May 2023.

We anticipate further orders from all these partners in the second half of the current year.

• Successfully launched new products, including our reformulated WellBiome® functional fibre and mineral blend, which has been made available via our own online store and on Amazon UK in recent weeks.

• In the last two months recruited three new partners in Asia who have all placed initial orders for SlimBiome and a major US weight management brand, with which we will be launching during the second half of 2023, initially in Europe and later in the USA.

• Published the results of a third human study on SlimBiome® which demonstrated statistically significant benefits to appetite and hunger regulation, with no safety, compliance or tolerance issues reported by the participating volunteers. This study underlines the effectiveness of a single dose of SlimBiome® in delivering hunger-free weight loss by non-invasive means.  This study was timely given the growing consumer, media and pharmaceutical company interest in this field following NICE’s approval of the injectable drug semaglutide. 

North America Sales and Business Development

The Company has received a number of orders from US partners who are owners of leading weight management or sports nutrition brands in the USA.  This is a major endorsement of the products and is the result of presentations at conferences and exhibitions and numerous customer visits by our US Business development Director, Zac Sniderman.  These will show in 2023 H1 accounts if manufactured and delivered by the end of June or more likely H2 2023. 

Discussions are advancing with a number of international Multilevel Marketing (MLM) companies based in the USA with possible sales in H2 2023 for Asian markets.  Discussions with an e-commerce brand have continued at a steady pace in 2023 for a possible end of the year launch.  In addition to above we have late-stage discussion with a number of e-commerce brands in both the US and Canada with potential sales in H2 2023.

During the first half of 2023 we have seen strong sales growth of Dietworks Appetite Control gummies in the USA in both e-commerce channels and traditional retailers and we foresee increased sales in H2 2023 with the possibility of line extensions.

We are in discussions with two US partners who are interested in purchasing WellBiome® with a potential US launch planned for Q4 2023.  The new projects would incorporate WellBiome in a final product for healthy aging and hydration.

Consumer Health and Ecommerce sales

The OptiBiotix online website has been transitioned from a shop window used to demonstrate product possibilities to partners to a commercial website and optimised to improve the customer experience.  The ecommerce business has opened up a number of new channels to market including Amazon UK and Walmart USA to allow customers from different locations/sites to have greater accessibility to our products. Increasing awareness on platforms such as Amazon UK have allowed brands such as SlimBiome to become a best seller within their respective categories.  Since the end of 2022 through to April 2023 we have focused more on promoting SlimBiome® Medical as a unique product which reduces hunger and cravings which can be used as part of any calorie restriction weight management plan.  This has led to rapid growth with the ecommerce business reaching operational profitability in April and May 2023 with the highest monthly sales on record and a sales increase of 1,200% (Figure 1).  We are seeing good growth on the e-commerce platform, T-Mall, in China, particularly with sale of our fruit gummies.

In 2023 we plan to grow our brands presence and securing listings on various channels including Amazon Europe and Amazon India whilst pushing hard for sales and customer loyalty.  The addition of WellBiome® to the online store in May 2023 is part of a strategy to enhance the range of different product offerings and products on the website throughout 2023.  Current product line extensions planned for SlimBiome® include a tomato and herb soup, a chicken soup, a Golden Syrup porridge, high protein chocolate bars and an indulgent range.

As we add more products, open up channels to new markets, and bring on new applications we should see continued growth within the Ecommerce business in 2023 and beyond.

Slimbiome Medical online sales growth

Our medical device registration for SlimBiome® Medical runs out in May 2024.  Brexit has added complexity and additional cost in reregistering a CE mark medical device with a £100k cost to renew the registration and an annual maintenance cost of £20-30K per annum per device (unflavoured and flavoured SlimBiome Medical). Given the CE mark is only applicable in Europe and we have similar products non CE marked in India and the Gulf states we are seeing this as an opportunity to rebrand and broaden the offering with different flavours to a wider customer group who may be dissuaded from purchasing a product with a medical connotation. 

OptiBiotix Health India

OptiBiotix Health India (OHI) was formed in November 2021 as a mid to long term strategic investment in the world’s most populous nation and forecast to have the highest population of medium to high level income customers in the world. Currently most middle-class consumers live in the European Union (EU) and the United States, but over the next decade, the majority will shift heavily toward India, with one in four  global middle-class consumers expected to reside in India by 2035 https://www.asianstudies.org/publications/eaa/archives/the-middle-class-in-india-from-1947-to-the-present-and-beyond/.

The formation of OHI has helped OptiBiotix avoid high import taxes and control the purchase and sale of ingredients (SlimBiome®) and final product (GoFigure®) manufactured and sold in India.  This has increased profit margins and given us a manufacturing base to export to other countries in Asia with lower manufacturing and transport costs than exporting from the UK. This will support future expansion and sales growth in the region.  The lower costs and The ‘created in UK and made in India’ tag helps penetrate the market and makes the product viable commercially.

We had two small customers and a large national player (Apollo Hospitals) in India in 2022.   During 2023 we have had orders from a number of new customers and the launch of a new product range called Slim-Pro by Health Bae, an emerging name in the multilevel marketing channel (see  https://health-bae.com ).  Whilst these are small first orders they are part of building the customer base and product profile across India allowing us to build the business. 

After a slow start following the launch of products with Apollo’s in September 2022 we are now seeing momentum increase with the number of stores selling GoFigure products increase month on month with sales in April double that of March and continued strong growth in May 2023, with a high returning customer rate. Apollo have agreed to extend the product range in H2 2023.   We are also pleased to be developing a product for the Indian Market with a multinational consumer goods company for launch later in the year.

The fundamentals of our marketplace remain very exciting, with modulation of the human microbiome attracting ever-increasing interest as the potential solution to a wide and growing range of life-style related health challenges. Unique, innovative products take time to gain market acceptance and our first-generation products are no exception.  We believe their strong science, clinical studies, and broad IP portfolio together with the industry awards and great customer reviews are starting to attract growing international recognition and with this more sales opportunities.

After strong sales growth through 2019 (£745K), 2020(£1.5m) and 2021 (£2.2m) we believe 2022 was an unusual year for the industry and the Company and that the actions we are taking to reduce costs and grow sales will move the Group to operational profitability, while broadening our product and partner base, and increasing sales of final products direct to consumers.  These actions will reduce the risks of revenues in future periods being impacted by timing differences in restocking or delays in individual product launches or regulatory approvals.

Our expansion into USA and Asia, the proven credibility of our science, the growing number of large partners, and a return on our investment in 2023 from our sales teams give us continued confidence in the long-term growth potential of the Group.

Whilst the Board are optimistic about the opportunities for the business in 2023, we remain alert to the threats posed by the risks described in the ‘principal risks and uncertainties’ section of the Strategic Report and we note that future trading may be affected by these external factors.  The Group’s mitigation strategies for these principal risks are also set out in this section.

We are confident that our strategy will continue to deliver sales growth in 2023 whilst the approaching commercialisation of our second-generation SweetBiotix® family of products and microbiome modulators offer exciting potential for future growth.  This is in addition to the Company having a continued exposure to the considerable growth potential in probiotics and skincare through the Group’s shareholdings in ProBiotix Health plc and SkinBiotherapeutics plc.

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

These financial statements were approved and authorised for issue by the Board of Directors on 23 June 2023 and were signed on its behalf by: S P O’Hara, Director

Consolidated Statement of Changes in Equity

Notes to the Consolidated Statement of Cash Flows

Notes

Notes to the Financial Statements are available in the printable PDF version