Wellnex Life is shaping up as the next major growth story in health and wellness as revenues surge
Health & Biotech
Health & Biotech
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With multiple product launches coming to market, the company looks on track for even stronger growth in the year ahead.
Health & wellness company Wellnex Life (ASX:WNX) has launched into 2022 with new product channels and an industry-leading distribution platform.
And this morning’s trading update confirmed that strong momentum, with a surge in group revenues as the company targets a pathway to profitability following last year’s strategic turnaround.
Shares in the company jumped by almost 10% following this morning’s update.
Demonstrating the strength of that turnaround, WNX booked half-year revenues across its product platform of $8.56m – a 1,099% surge from the prior year period.
The result validates WNX’s strategic decision to acquire Brand Solutions Australia (BSA), a move which has given it a key advantage in Australia’s lucrative health & wellness markets, which was valued earlier this month at more than $10bn.
Those revenue gains flowed through to a material decrease in net losses to $2.15m, and the company established traction despite the disruption caused on COVID-19 on domestic retail as well as the global supply chain bottlenecks.
And the positive growth trend puts Wellnex in position to realise further gains in the months and years ahead.
The company remains on track “to achieve the previously announced target of $21 million in revenue for FY22”, it said.
“Wellnex also expects to see an uplift in margins as wholly owned brands contribute a larger portion of revenue,” the company added, putting it on a “trajectory of profitability in the short term”.
Strong product suite
Wellnex achieved its revenue growth via the execuioin of a multi-channel product strategy.
Its product launches in the December half included Wagner Liquigesic brand, Australia’s first TGA-approved soft gel liquid paracetamol product.
The brand commenced stocking in Chemist Warehouse, Australia’s largest pharmacy chain, in October 2021 and reported strong early sales.
In addition, Wellnex also received purchase orders of circa $1.6 million for Wagner Liquigesic product which are yet to be invoiced.
“These orders will be supplied in the second half of FY22 and Wellnex anticipates further purchase orders will be received this financial year,” the company said.
Other product highlights included the launch of The Iron Company and Wakey Wakey, two gummy-based health products that provide boosters of iron and energy, respectively.
Both products secured distribution deals through major pharmaceutical and grocery retailers with ranging in Coles and Woolworths, with the launches expected in the March quarter.
Wellnex Life also secured Australia/New Zealand distribution rights for Mark Wahlberg and Tom Dowd’s sport and supplements brand Performance Inspired
The exclusive deal with Chemist Warehouse will see products set to be available in the first quarter of FY23.
The company also launched its Pharmacy Own brand, creating a channel for the launch of equivalent products to major brands at lower prices.
For Pharmacy Own, Wellnex secured distribution through CH2, Australia’s only fully integrated pharmaceutical and medical consumable distributor.
“CH2’s distribution network includes over 2,500 pharmacies that will fast-track the distribution of the Pharmacy Own brand,” WNX said.
And lastly, it successfully launched a joint venture with the ASX-listed Australian Dairy Nutritionals (ASX:AHF) to launch Australia’s first locally made organic A2 infant formula range, with distribution through Chemist Warehouse before the end of 2022.
In summary, it markets a particularly exciting time for investors to participate in what’s shaping up as a major ASX growth story
“It has been a transformational six months for Wellnex as we establish ourselves as a major participant in the growing health and wellness market,” CEO George Karafotias said.
“We have been working hard to deliver value for shareholders and innovate new and exciting products and with six new brands launched and licensed during this half.”
“We’re pleased to have grown revenue substantially in a time of challenging market dynamics and can see the path to profitability ahead.”