Australian genomic life science company, EZZ Life Science (ASX: EZZ) has posted favourable quarterly results, with the company reporting strong sales results and a healthy cash balance of $10 million plus as of 30 June 2022.
According to Glenn Cross, chair of EZZ Life Science, the business has pursued an aggressive stockist and digital expansion strategy in Asia which is delivering strong sales growth.
“The pandemic has pushed more people online and ramped up consumer spending on health and wellness,” Cross said.
“As a business we identified significant opportunities in these areas and mobilised quickly to adjust our strategy accordingly and it is already delivering exceptional results.
“Consequently, we have continued our strong sales trend closing this quarter with $4.6 million in cash flow from sales, which is up 16 percent from the last quarter. These are outstanding results and we’re very proud of our entire team and network of stockists for their commitment and focus.
“We achieved an overwhelming sales response to our recent online shopping event in China via Tmall Global, resulting in a 46 percent increase in sales on last quarter. We’re also experiencing rapid growth in our new ecommerce distribution channels across our international markets, all of which is delivering excellent sales growth for the business.
“Our investment in research and development, which is resulting in the formulation and release of new and market leading innovative health and wellness products combined with our expansion strategy, is enabling the business to surpass growth expectations.”
Activities in Chinese market leading the way
“North Asia including China is a market we are focusing heavily on. EZZ Life Science established a global store on Douyin, China’s version of TikTok, in early June 2022. Within the first 22 days of trading, we generated over $85,000 in revenue,” Cross explained.
“This is an extremely positive result. There are over 670 million active users on the Douyin platform so we are focused on deepening our investment on this platform with the aim of solidifying its role as another important ecommerce platform for our sales, alongside Tmall Global.
“We are also continuing to achieve excellent sales results from our flagship store on Tmall Global, with our L-Lysine Growth Capsule becoming a winning product in the Chinese market during Tmall’s 618 Shopping Festival, one of China’s major online shopping festivals. Our L-Lysine Growth Capsule is the market leader for its category on Tmall Global which is an extraordinary result.”
Continued investment in the Australian and New Zealand market
“While we are expanding our presence across Asia, we are also focused on growing awareness of our brand and increasing sales in Australia and New Zealand,” Cross added.
“Towards the end of the quarter, EZZ Life Science launched a new category, our hair care category and this included the release of four new products, taking our internally developed product line up to a total of 17.
“Our new hair care line up is the perfect addition to our product range of health and wellbeing products. In keeping with our omni-channel approach to distribution, the products are available for sale on our Australian ecommerce site as well as through an increasing number of retailers both instore and on digital shelf.”
“During quarter four of the 2020 financial year, our operational cash flow remained positive while outflow on advertising expenses increased four times compared with the previous quarter due to our expansion and new market immersion activities,” Cross said.
“Sales increased by 16 percent from the previous quarter, reaching $4.6 million. The 16 percent increase is partially due to the increase in sales revenue generated by the EZZ brand which increased by 29 percent in quarter four compared to quarter three. This also reflects good practice in receivables collection. Net operating cash flow was impacted during the quarter due to the increased marketing and advertising expenses for Tmall Global’s shopping festival. We also settled rebates with Chemist Warehouse during the quarter, which were from sales from the previous financial year. We closed the quarter with an operating cash flow of $117,817.
“One distribution channel stood out over the past quarter, with an 89 percent increase in sales compared to quarter one. As a predominantly domestic, direct to consumer channel, the official EZZ online store has seen a dramatic increase in traffic, some 310 percent.
“The sales revenue from our Bone Growth Capsule increased by 54 percent this quarter, although most of this growth came from Tmall Global and overseas sales. For the local market, the product with the highest percentage of increase was Male Boost Stay Energizer, which saw an increase of 93 percent in sales revenue.
“The company is actively exploring the youth supplement space, and aims to contribute to youth exercise programs and training camps, with a plan to host sports training camps for youths and young adults as a commitment to our company mission to improve quality of life and human health.
“Overall, we have achieved an excellent result which demonstrates strong growth and a solid base from which to continue our expansion and investment plans during the new financial year.
“As we continue to develop new products and add them to our product range, we are simultaneously finding new ways in which to market them to reach new customers. We have taken the first steps with a new ecommerce outlet via Douyin in China and we look forward to maximising our potential through this new marketing channel as well as continuing to excel in all other more traditional means of sales.”
About EZZ Life Science
EZZ Life Science Holdings Limited (ASX:EZZ) is a genomic life science company with a mission to improve quality of life and human health. EZZ Life Science has a focus on genomic research and development to address four key human health challenges: genetic longevity, human papillomavirus (HPV), helicobacter pylori, and weight management. EZZ Life Science is passionate about investing in the future of consumer health through the development of e-commerce and distribution of high-quality products via omnichannel models across Australia, New Zealand, China and worldwide.