Wellnex Life on track to meet guidance as sales continue to grow
Wellnex Life expects to hit its $29 million revenue target as its brand offering expands.
Consumer healthcare business Wellnex Life (ASX: WNX) has announced it is on track to meet its guidance of $29 million for the 2023 financial year, up 55% on the previous year.
This increase has primarily been the result of growth in both the company’s brand offering and its intellectual property (IP) licencing.
Over the last 18 months, Wellnex has launched or acquired five new brands and secured IP licencing agreements with some large domestic and international pharmaceutical companies that are expected to accelerate revenue and margins even further in the next financial year.
“Wellnex over the last 18 months has been laying the foundations to be a significant player in the healthcare market and that work is starting to pay dividends,” Wellnex chief executive officer George Karafotias said.
“We will continue to see new products coming to market throughout 2023 that will further strengthen the financial performance of the company,” he added.
Higher guidance budgeted for FY24
Wellnex today also confirmed its guidance for the 2024 financial year as $47.2 million, which is 63% higher than its FY2023 guidance.
This would coincide with an increase of gross margins as the company’s wholly-owned brands increase as a portion of total revenue.
Wholly-owned brands currently account for 15% of FY2023 revenue although this is budgeted to increase to 27% for FY2024. Meanwhile, the lowest margin segment, being distribution arrangements, is expected to reduce from 52% of total revenue to 5% in FY2024.
In addition to brand recognition and increased distribution channels, Wellnex said continued growth would come from extending the brands with new products being brought to market throughout 2023.
Joint venture brands with Chemist Warehouse and OneLife Botanicals are budgeted to increase from 4% this year to 21% of FY2024 revenue, providing a healthy margin for Wellnex.
Profits from IP licencing arrangements also go straight to the bottom line as there are minimal costs in facilitating these relationships.
New brands launched
Wellnex launched three brands in the first half of FY2023: Pharmacy Own medicines (offering consumers competitively-priced equivalent products to major brands), Mr Bright premium teeth whitening products, and The Set.Co skincare range.
For this second half of FY2023, the company and its joint venture partner Chemist Warehouse are planning the launch of medicinal cannabis products for the Special Access Scheme Category B (SAS-B) market.