EZZ to use strong FY21 results to expand growth in international markets
Health & Biotech
Health & Biotech
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A solid performance in FY21 is set to continue for EZZ into this financial year as the company focuses on maintaining excellent operational performance and expanding its markets.
After an oversubscribed public offering, EZZ Life Science Holdings (ASX:EZZ) listed on the ASX in March and is now boldly forging ahead with plans to transform into a fully integrated life sciences company.
Established just three years ago, EZZ recorded strong FY21 results across all key metrics with its balance sheet at $8.9m cash and no external debt other than leases.
Revenue increased by 29% to $22.3m, exceeding the expected growth of 25%, while gross margins rose from 23% to 56%.
As a result, there was a material uplift in EBITDA, up 66% to $2.8m with net profit after tax improving 28% to $2m.
EZZ rewarded investors with a maiden, fully franked dividend of 0.45 cents per share.
The dividend represented a payout ratio of 7.5% based on the company’s earnings per share of 5.98 cents, which increased by 13% throughout FY21.
The portion of EZZ’s revenue derived from its top five customers throughout FY21 reduced from 83% to 38%. The decrease was reflective of the company’s strategic decision to reduce risk associated with its revenue base being reliant on a concentrated customer base.
EZZ complemented a wholesale distribution model with a direct-to-consumer strategy selling its own branded health supplements launched in March 2020, with revenue starting at a low base of $800K — representing less than 5% of revenue in that year.
However, that figure has risen to $11.4m in FY21, representing 51% of the company’s total revenue.
The company broadened its health supplements range by introducing new products during FY21. It had 14 stock-keeping units on sale under the EZZ brand at June 30, 2021 compared with three at the start of the financial year.
In Australia and New Zealand, the company is developing new distribution channels for its branded products, some of which are already sold in membership warehouse Costco.
The company is also establishing online stores on key e-commerce platforms for direct-to-consumer sales in the two markets.
EZZ is building brand awareness in China along with other Southeast Asian markets including Singapore, Malaysia, Thailand, Philippines, Indonesia and Vietnam by setting up stores on major e-commerce platforms. North America and Europe are also target markets for EZZ products.
The company executed a successful omni-channel marketing strategy by increasing investments in advertising and promotional activities to $7.8m in FY21.
EZZ’s chief executive officer said the company was focusing on China and expanding markets, which had so far proven to be successful.
“Our primary objectives are to generate sustainable growth across industry life cycles and deliver a satisfactory return to shareholders in the long run,” he said.
“EZZ is driven by a set of overarching strategies with a focus on maintaining excellent operational performance across existing businesses and deploying capital in existing business segments with unique capabilities and expanding markets.
“Through FY21, the EZZ branded products focused on health supplements, while our product development pipeline has and will increasingly feature solutions based on genomics research for the years to come.”
This article was developed in collaboration with EZZ, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.