One Stock in Healthcare Space For Long-term Growth

As the market participants are aware, the outbreak of COVID-19 has impacted numerous sectors. However, some companies are now expected to perform well. Despite the headwinds of coronavirus pandemic, this company has posted decent results for 12 months ended 31st March 2021. This company has made several developments in the year ended 31st March 2021 and these developments could help the company moving forward. The stock price of this company rose by ~23.8% in 1 month and by ~40.5% in 6 months.

Me Today Group

Summary:

  • MEE posted an operating loss of $2.9 Mn, a rise of $2.1 Mn on the operating loss of $0.8 Mn recorded in the previous year.
  • MEE has agreed to acquire 100% of King Honey Limited for the total consideration of $36 Mn.
  • As at 31st March 2021, the company was having cash of $5.0 Mn which could help the company moving forward.

Me Today Group (NZX: MEE) owns as well as operates the Me Today brand, which is a NZ founded as well as based health and wellness brand. It produces premium quality products clearly linking supplements and natural skincare, which makes it easier for the consumers to shop. Me Today Limited, The Good Brand Company Limited as well as Me Today NZ Limited are limited liability companies. These companies are incorporated as well as domiciled in NZ. The group is engaged in the business of producing, selling, and marketing health and wellbeing products or it acts as an agent on behalf of other health as well as wellbeing suppliers.

Decent Results for 12 months ended 31st March 2021

The company’s revenue from continuing operations amounted to $1.143 Mn, which reflects a rise of 102% on the YoY basis. Notably, its net loss from the continuing operations amounted to $2.860 Mn. The company has reported robust progress as it deploys towards building the Me Today brand as well as business globally. The company has managed to renew the retail distribution agreement with Green Cross Health in NZ. Me Today range is stocked in 300 Unichem and Life pharmacies and access is opened up to other select retailers. The company has also signed new global distribution partnerships in Japan, Ireland and Australia. This provides access to the hundreds of new retail outlets.

Key Data (Source: Company Reports)

The company mentioned that significant investment was made into building the Me Today brand, with creative advertising as well as social media campaigns, and it also secured protection of brand IP. MEE has further established The Good Brand Company as the trustworthy supplier to the Pharmacy as well as health store retail channels. The company mentioned that the sales are expected to escalate over the time span of 12 months ended 31st March 2022 as MEE executes the Invest and Grow strategy. The capital raise was wrapped up successfully during the period, which provided $4.3 Mn in the additional growth capital. As at 31st March 2021, the company was having a cash of $5.0 Mn in order to assist the planned growth strategy.

Acquisition of King Honey Limited

In the release dated 31st May 2021, the company made an announcement that it has agreed to acquire 100% of King Honey Limited from the interests associated with Terry Jarvis. This involves the total consideration of $36 Mn. It needs to be noted that King Honey is one of NZ’s premium Manuka Honey producers. The company has been operating since 2016 and has the vision to bring highly skilled beekeepers together in order to develop the fully integrated Manuka Honey business.

King Honey was having the revenue amounting to $16.5 Mn and EBITDA amounting to $3.87 Mn in the financial year ended 31st March 2021. Also, it is anticipating growth in revenue and EBITDA in the year ended 31st March 2022 as revenue has been forecasted to be $21.5 Mn and EBITDA to be $5.26 Mn.

MEE Confirmed $10 Mn Placement to Wholesale Investors

As mentioned earlier, the company announced that it has agreed to acquire 100% of King Honey Limited. In conjunction with this acquisition, the company also made an announcement that it intended to garner $15.75 Mn (involving an issue price of 8.8 cps) in order to partially finance the acquisition. The company has mandated CM Partners to help in the capital raise.

The company has advised that it has got firm commitments for $10 Mn of new Me Today shares at 8.8 cps. These commitments are from the range of financial market participants as well as other wholesale investors. On 10th June 2021, the company announced the opening of $3.75 Mn offer to the retail investors. It consists of an offer to existing Me Today shareholders via SPP as well as the general offer to the retail investors via General Retail Offer.

It also announced that it has secured the firm allocation from the market participant for a further $2 Mn of new capital.

Also Read: Five Interesting NZX Stories To Watch Out For Today—TAH, MEE, NPH, SCL and TLT

Outlook

The company mentioned that there is significant potential for the new as well as modern brand, like Me Today, which links supplements and natural skincare as well as produces the premium quality products.

The company’s focus is towards building awareness as well as sales of Me Today products. It plans to achieve this by making deployments towards marketing, new product development as well as delivery methods which help in ensuring excellent results.

MEE has also highlighted that it has managed to establish excellent retail partnerships as well as e-commerce channels this year. This focus would continue for Me Today as well as agency brands, in NZ and offshore. The company has been witnessing increased interest in Me Today from the retailers and distributors and it anticipates that the retail distribution would further expand in FY 2022.

On 11th June 2021, the stock price of MEE closed at NZ$0.104 per share, down by 2.80%.

Do Read: 4 Hot Penny Stocks Under $1 That Investors Can’t Ignore


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