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InnovaDerma reaps benefits of focus on consumers during pandemic

Snapshot

  • Makes Skinny Tan – the popular tanning product
  • Products stocked by Superdrug, Tesco and Boots
  • Online customer traffic rose during store closures
woman sun bathing

Quick facts: InnovaDerma PLC

Price: 57.5 GBX

LSE:IDP
Market: LSE
Market Cap: £8.34 m
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What it does

InnovaDerma PLC (LON:IDP) makes a range of beauty and personal care products.

The company, which floated in the autumn of 2016, makes the Roots haircare range, as well as a men’s skincare range called Charles + Lee.

It also owns Prolong, which is the world’s first FDA-cleared medical device for premature ejaculation which it launched in the US and Australia in 2018. 

InnovaDerma’s most famous product is Skinny Tan – the firm’s wildly popular range of self-tanning lotions.

In a nod to the quality of its products, major retail chains such as Tesco, Boots and Superdry stock InnovaDerma goods.

Early in 2020 it launched Nuthing, a new brand and category in hair removal.

 

How it is doing

In July, the firm said it performed “resiliently” during the coronavirus pandemic lockdown, though the health and beauty retailer has been hit by rising advertising costs.

With a flexible model, channeled efforts towards its established online platform after retailers such as Boots and Superdrug were forced to close their doors during the pandemic.

Customer traffic in the UK was up 27%, while in the US it was ahead 65%. This helped pick up the slack from the bricks and mortar operation and contributed to an eventual 2.3% boost to revenues to around £13.2mln for the 12 months ended June 30. Cash at the period-end was £1.3mln.

However, higher advertising costs, particularly on Facebook, will lead to “much reduced profits” compared with last year.

Innovaderma is looking to diversify the platforms through which it markets its product lines, such as the haircare product Roots and the Charles + Lee men’s grooming brand, and it has acquired AI technology to help lower its costs.

In August, chief executive Kieran Callan stepped down while financial controller Warren Dockary was promoted to chief financial officer.

 

What the boss says: Joe Bayer, interim chief executive and executive chairman

"The board and I would like to thank Kieran for his contribution and strategic insight over the past three years, first as a Non-executive Director then as a CEO when he was appointed in 2018. InnovaDerma is a strong business with a clear strategy, underpinned by a multi-channel approach with ecommerce being the most important factor for future growth.  We have agreed that now is the right time for a change of leadership in the group to implement that strategy and maximise the opportunities that lie ahead."

"We are pleased to have appointed Warren to the role of Chief Financial Officer, and it is particularly pleasing to make this very well-deserved promotion from within the business.  Warren has deep knowledge of the business and his appointment strengthens our senior management team."

 

Inflexion points

  • Platform diversification
  • Focus on consumers balances loss from shop closures

 

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