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- Wellness and Beauty Solutions (WNB) has reported its cash flow for the second quarter of the 2020 financial year (FY20)
- It has increased its sales receipts to nearly $4 million for the second half of FY20 – this is a 74 per cent increase from the previous quarter
- However, due to further production and registering in international markets, WNB expect to spend more next quarter
- Revenue from Immersion Clinical spas have unfavourably impacted the company’s performance
- On market close, WNB is down 41.7 per cent, selling shares at 0.7¢ apiece
Wellness and Beauty Solutions (WNB) has reported its cash flow for the second quarter of the 2020 financial year (FY20).
The company has increased its sales receipts to nearly $4 million for the second half of the 2020 financial year. This is a 74 per cent increase from the previous quarter, despite lower receipts from the Immersion Clinical Spa network.
However, it is expected that next quarter’s cash outflows are to be higher due to an increase in stock production and costs related completing product registration compliance needed in international markets.
CosmoProf
WNB’s subsidiary, The Giving Brands Company (GBCo), attended the beauty and cosmetic trade show, CosmoProf, in Asia.
At the show, major retailers and distributors showed strong interest in targeting international markets in Asia, Europe and North America.
Follow-up meetings occurred this month with major pharmacy retailers in all targeted regions and with DKSH Global, the leading Market Expansion Services Group with a focus on Asia.
The interest was for the company’s three ELLE product ranges, tanning range TANNED, and nailKALM which it manufactures and distributes.
For the third quarter, the company will focus on advancing sales contracts, product registration and distribution agreements.
Immersion Clinical Spas
Revenue from Immersion Clinical spas unfavourably impacted the company’s performance.
Actions have taken place to address the decline in clinic revenue have shown some traction, sustaining improved performance has been challenging.
“To deliver an improved result from its clinic network, WNB initiated discussions of a possible commercial arrangement with a major retail group during the quarter,” the company told the market.
Placement
Last year, WNB had successfully raised $6 million by an oversubscribed share placement. The placement was to institutional and sophisticated investors.
Majority of the funds will be used for product manufacturing, new brand launches and the execution of our geographical expansion strategy.
GBCo Marketing momentum
A couple of months ago, WNB signed its first international distribution agreement with Sisterhood Beauty for its owned TANNED and licensed Jbronze by Jennifer Hawkins’ tanning ranges.
Under the three year agreement, Sisterhood will distribute both ranges in New Zealand across 600 retail outlets.
The sale of GBCo’s tanning products in Australia were marginally lower than forecast for the period due to mild weather conditions in Victoria and New South Wales.
“The company believes a return to normalised warmer weather patterns in the second half FY’20 and planned marketing activity will result in some uplift in revenue from existing retailers for FY 2020,” it said.
Just this month, GBCo held on to its strong relationship with Pacific Magazines to be the primary sponsor for the Girlfriend Role Model Search.
This partnership gives TANNED access to over 2.5 million readers a month across its digital and print platforms.
GBCo will invest 10 per cent of the full marketing value of the initiative and Pacific Magazines will provide a media, editorial and marketing campaign valued at more than $800,000 as part of the campaign.
Ambassadors for the tanning range Kris Smith and Natalie Roser have been strategically involved in promoting the brand’s values.
Three new private label homeware ranges exclusively created by for Australian department store, Myer, sold well in the quarter. The company is confident a follow-up order will be placed for delivery to Myer in late FY20.
True Solutions
WNB purchased True Solutions in August 2019. The company said budget expectations were in line.
True Solutions is one of Australia’s leading distributors of professional and cosmeceutical skincare and makeup brands. It expanded WNB’s distribution network to over 1300 medical cosmetic clinics spas and beautician salons.
Key product ranges distributed by True Solutions were also introduced to WNB’s
Immersion Clinical Spa network during the period.
Next quarter
During the next quarter, efforts will be focussed on securing sales and distribution agreements for key GBCo brands with major retailers and distributors.
The company expects True Solutions to continue to perform in line with forecasted expectations.
Its three ELLE product ranges (ELLE Makeup, ELLE Kids and ELLE Baby) will be launched in the second half FY20 supported by ELLE magazine in Australia.
Unfortunately, WNB is down a staggering 41.7 per cent, selling shares at 0.7¢ apiece.
