Strong FY21 results underpin EZZ’s foothold in growing life sciences sector

Boldly launching on the ASX in the midst of a pandemic, EZZ’s FY21 results show it is becoming a strong player in the life sciences sector.

Newly listed EZZ Life Science Holdings (ASX:EZZ) is continuing its acceleration into a fully integrated life sciences company, after recording strong FY21 results across key metrics.

Revenue increased by 29% to $22.3m, exceeding the expected growth of 25%, while gross margins rose from 23% to 56%.

That flowed through to a material uplift in EBITDA, up 66% to $2.7m with net profit after tax improving 28% to $2m.

Throughout FY21, the portion of EZZ’s revenue derived from its top five customers reduced from 83% to 38%, as the company strategically moved to reduce risk associated with its revenue base being reliant on a narrow customer base.

The company’s move away from wholesale distribution of the EAORON branded skincare products to direct-to-consumer sales of its own branded health supplements has proven successful.

EZZ branded health supplements were 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 surged to $11.4m in FY21, representing 51% of the company’s total revenue.

Since the start of calendar year 2020 and during a pandemic era, no fewer than 19 drug, device and diagnostic outfits have listed on the ASX. While many have struggled to maintain momentum throughout lockdowns and associated economic conditions, EZZ has defied this trend.

EZZ rewards investors with dividend payout

After an oversubscribed public offering, EZZ — which commenced operation in 2018 — listed on the ASX on March 3, 2021.

Among its operational strengths, EZZ highlighted its ability as a young, recently listed company to pay 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 ,which increased by 13% throughout FY21.

Careful planning key to EZZ’s success

EZZ chief executive officer Mark credits the FY21 results to meticulous planning and execution by the EZZ team.

He said the company’s focus on sales in international markets such as China, when it launched its own branded products in March 2020, had proven to be a strategically good move.

The launch of EZZ’s own branded products, the opening of a flagship online store on Tmall Global in China and building its broader international distribution footprint, have all proven successful strategies to diversify the company’s revenue streams.

Another reason of EZZ’s success is continuous product development as it aims to add new products to its portfolio which cover a wide range of market segments in line with customer demand.

To drive growth in FY21, EZZ executed a successful omni-channel marketing strategy increasing its advertising and marketing spend to $7.8m.

EZZ focuses on long-term sustainable growth and expanding international footprint

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. It is also establishing online stores on key e-commerce platforms for direct-to-consumer sales in the two markets.

EZZ is continuing to build 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.

Going forward north America and Europe have also been earmarked as target markets for EZZ products.

The company will continue to build brand awareness of EAORON in Australia and New Zealand through existing channels with a focus on supermarkets.

Future investment in R&D and manufacturing facility

More broadly, EZZ is on mission to improve quality of life and human health. The company focuses on genomic research and product development to address four key areas affecting human health including genetic longevity, human papillomavirus (HPV), helicobacter pylori and weight management.

EZZ has undertaken university partnerships to advance research into these four key areas.

It has also earmarked establishing a Good Manufacturing Practice (GMP) certified manufacturing facility in Australia or New Zealand to improve production efficiency.

“Central to these strategies is the transformation to a fully integrated life science company with a strong cross-functional support including genomic research, in-house manufacturing, omni-channel sales and marketing and in-house data analytics technology,” Mark said.

“Our vision is improving quality of life and human health and our product development pipeline will feature healthcare solutions based on genomics research for 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.