Market Guidance

Vita Life Sciences (ASX: VLS) announces the following guidance for the Full Year ending 31 Dec 2022 (FY 2022):

Sales: $64.0m-$65.0m (FY2021: $57.1m, FY2020: $46.5m)

Pre-tax Profit: $9.5-10.0m (FY2021: $11.2m, FY2020: $8.1m)

FY2022 Revenue:

• Moderate growth across the key markets of Australia, Malaysia, Singapore and export sales into China is expected; and

• New customer acquisition and increased market penetration continues to support the Group’s sales performance.

FY2022 Pre-tax Profit:

• Reflects the Company’s brand building investment strategy to drive higher consumer sales and increase retailer trade support; and

• Normalised advertising and promotional expenditure; i.e. FY2020-FY2021 expenditure was reduced due to Covid-19 uncertainties

Still forecasting growth but expect 2023 trading conditions to be softer

As an aside I didn't get any answer on my question on if they plan on going mainstream. Thus, in my view, their vitamins remains a niche product sold in specialty stores and some local chemists which is a negative especially in a negative growth environment where consumers cut back on spending.

Although not specified in the latest announcement, it appears they have paused their share buyback.

Based on the above update, I've now fully exited my position.

For those that are unfamiliar, Vital Life Sciences manufacture and sell vitamin products across the APAC region. Their biggest markets are Australia (Herbs of Gold) and Malaysia (Vita Health), but they have operations other asian countries such as China and Singapore.

Currently VLS is doing a selective buyback up to 8m of its shares.

Have some doubts about this considering cash flow was negative for 1HFY22 due to increase in inventory/working capital.

Perhaps better to spend the money on marketing and putting more of their products in the big vitamin retailers such as Chemist warehouse or the supermarket chains. Which would in turn help clear some of the inventory stocking originally done to mitigate supply chain issues. Something I may ask investor relations about...

[held]