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Capital Network's analyst Ed Stacey on Innovaderma's strong growth drivers being ready to kick in

Analyst Ed Stacey talks investors through InnovaDerma (LON:IDP) reported results on 21 February for the first half of the full year (FY) to June 2019. Results were in line with January's trading statement, with first half (H1) revenues down 7.5% driven by disruptions to the direct-to-consumer (DTC) sales channel. The company has indicated that a number of elements are in place to drive a strong acceleration in H2 - DTC Issues resolved, major new high-street retail channels, ongoing growth in the Roots haircare range.
The shares have de-rated materially in valuation terms and now trade on a 2019e price/earnings (P/E) multiple of 9.9x and enterprise value (EV)/sales of 0.9x. These multiples are pricing-in a low probability of strong revenue growth resuming says Ed. The H1 release discloses +37% revenue growth in the first six weeks of H2, and he notes that this is without yet realising the benefit of new retail channels to begin in March. Ed examinse the valuation in this report, and concludes that there is substantial upside potential.

 
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InnovaDerma PLC Timeline

CN Research
February 25 2019

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