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Record full-year revenue powers Holista Colltech’s (ASX:HCT) bullish 2022 outlook

Image Source: © Andreus | Megapixl.com

Highlights

  • Holista Colltech posted a 12.9% increase in group revenue to a record high of over AU$8 million in FY2021.
  • The pre-tax net loss narrowed significantly, driven by a decrease in expenses and the change in the sales mix between various businesses.
  • Holista’s relatively established businesses- Dietary Supplements and Ovine Collagen generate better margins.
  • The Company expects to deliver further revenue and earnings growth in 2022 as it has multiple avenues for growth

An innovator in health & wellness solutions, Holista Colltech Limited (ASX: HCT) has announced unaudited full-year results for the 12-month period ended 31 December 2021, driven by strong performance of its business divisions. The Group posted a 12.9% increase in revenue to a record high of just over AU$8 million for FY2021 ended 31 December 2021.

The pre-tax net loss narrowed significantly to AU$1.2 million in 2021 compared with a loss of AU$5.6 million in the previous year. The improved loss position has been driven by a decrease in expenses and the change in the sales mix between the Company’s various businesses.

The Company was able to achieve the improved results despite the negative impact of COVID-19 as three out of its four key divisions delivered strong growth over the previous corresponding period (pcp).

Holista’s relatively established businesses- Dietary Supplements and Ovine Collagen divisions have generated better margins. Moreover, the Company expects its Healthy Food Ingredients and Infection Control Solutions segments to see improved margins as these businesses continue to scale up.

ALSO READ: Holista Colltech (ASX:HCT) records strong sales across all divisions in Q4

Dietary Supplements – The largest income contributor 

Holista’s Dietary Supplements division contributed the largest income to the group. Notably, the Group’s sales rebounded strongly from the easing of COVID-19 restrictions in Malaysia and increased consumer focus on health and wellbeing. As a result, the business posted a revenue jump of 18% to AU$6.2 million.

The launch of Holista’s water soluble vitamin D product is also expected to contribute to growth in this business. As Vitamin D is being increasingly recognised as a key nutrient for immunity, the Company plans to leverage the opportunity in Malaysia and other countries.

ALSO READ: Which health & wellness trends are paving success path for Holista Colltech (ASX:HCT)?

Healthy Food Ingredients’ sales up 33%

The sales for Holista’s Healthy Food Ingredients business division edged up 33% to AU$1.4 million in 2021, driven by

  • Increased orders for GI Lite™ innovation from US-based Costanzo’s Bakery, Inc. and HWH International
  • Increased orders for the proprietary 80LessTM healthy sugar substitute from drinks manufacturer Rex Industry Berhad.

Holista also signed a term sheet collaboration agreement with Country Farms, a wholly owned subsidiary of Berjaya Corporation Berhad, to customise and commercialise the Company’s unique healthy food innovations for several international franchises under Berjaya’s umbrella.

ALSO READ: Five factors that position Holista Colltech for unabated growth in 2022 and beyond

Country Farms has completed the final testing of a healthier version of croissant that will be launched in 327 Starbucks stores across Malaysia in H2 2022. Holista expects more food products using its technology to be announced later in the year.

Strong sales growth for Ovine Collagen Division

The Collagen Manufacturing business division registered strong sales growth of 43% year-on-year to AU$248,000 in the reported period. The strong sales momentum was majorly led by increased orders from Behn Meyer in Thailand amidst easing COVID-19 restrictions.

Source: HCT Website

Meanwhile, Holista believes that its Ovine Collagen business could lead to an improvement in earnings this year. Guangzhou Sinbio Cosmetic Co Ltd is advancing with tests and regulatory approvals to import the cosmetic-grade collagen into China.

As part of this process, Holista has announced the approval of Material Safety Data Sheet (MSDS) for bulk ovine collagen by Chinese Customs. The development would allow the Company to ship bulk raw collagen to the country for final testing.

ALSO READ: Big upside in 2022 for Holista Colltech’s ovine collagen in buoyant skincare market

New products to drive Infection Control Solutions segment

Revenue from Holista’s Infection Control Solutions division fell to AU$229,000 in 2021 from AU$665,000 in the pcp amidst COVID-19 induced supply chain disruptions. On a positive note, sales have started to recover in recent months and the launch of new products are expected to further lift the business performance in 2022.

A turnaround is expected in the business this year, driven by improved sales of its NatshieldTM sanitiser, nasal balm, and wipes.

Holista’s nasal balm, which was launched online in Q4 2021, will be sold in the United States through multi-level marketing network soon. Moreover, the previously announced SARS-CoV-2 rapid test kit branded as Gene Sign that is awaiting approval in different geographies, including Columbia and North America.

ALSO READ: How Holista Colltech’s superior food alternatives drive healthy living and profits

In essence, the Company expects its business divisions to deliver further growth in revenue and earnings in 2022, on the back of multiple growth opportunities and improving trading conditions.


 


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