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On 6 February 2019, Wellness and Beauty Solutions Limited (ASX:WNB) which is a non-surgical medical aesthetics services company from the consumer services industry group announced that it has entered into a distribution agency agreement with Australian Beauty Connections Pty Ltd for its beauty products. As per the agreement, WNB contracted Beauty Connections to represent the brands of the company in the significant Australian grocery market which has more than 1,800 retail doors. Both the companies will be working together where they will explore opportunities in the offshore market where Beauty Connections has a distribution experience. The agreement is a 2 years agency agreement; and under this, Beauty Connections will be responsible for warehousing, as well as for delivery and Account Management with retailers for the WNB brands. It is worth noting that Australian Beauty Connections is a distribution agency for beauty as well as wellness brands in all major Australian national retailers such as Woolworths, Coles, Target, Priceline and Big W. There are other brands as well under the portfolio of Australian Beauty which have regional distribution contracts and extended to South East Asia. This association thus looks fruitful for WNB. Â
Christine Parkes who is the Managing Director and CEO of Wellness and Beauty Solutions stated that the company is delighted to appoint Australian Beauty as their distribution agency. Through this agreement, WNB will get an opportunity to extend its footprint beyond the pharmacy and enter into supermarkets. This new arm will help in enhancing the sales from the upcoming fiscal year.
During the December quarter which ended on 31 December 2018, the companyâs name changed to Wellness and Beauty Solutions Limited from Total Face Group Limited. Itâs ticker also got changed to âWNBâ with effect to the above. The company during the period was successful in raising $7 million (before cost) through a capital placement and approximately A$1.4 million through non-renounceable rights issue. The amount generated through the Placement and Entitlement offer was slated for use to manage growth for clinic network and retail brands. A portion was also indicated to be directed towards any efforts on restructuring, debt management and repositioning the Company.
The company during the quarter acquired 'The Giving Brands Company Pty Ltd (GBCo) which is a retail beauty brands company. The company received a receipt of $2.5 million for the consolidated company. The contribution from GBCo was as per the expectations.
There was a net cash outflow of A$2.439 m through the operating activities of the company. Here, the main reason for cash outflow was due to the payment made for product manufacturing and operating costs, advertising and marketing, staff costs and administration and corporate costs.
There was a net cash inflow of A$0.017 million from the investing activities of the company. Here, the main source of cash outflow was through the payment made to acquire property, plant and equipment and cash flows from loans to other entities. There was a net cash inflow of A$7.903 million from financing activities of the company.
By the end of the December quarter on 31 December 2018, the net cash and cash equivalent with WNB was $5.7 million.
By the closure of the trading session on 6 February 2019, the price of the share was A$0.039, down by 2.5% as compared to the previous trading dayâs closing price despite the above news on distribution enhancement. The stock has a market capitalization of A$13.82 million.
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