Nutritional Growth Solutions Ltd. a global nutrition company that creates scientifically formulated and clinically tested supplements to support growth development in children, is pleased to provide a business update for the quarter ending 31 March 2021 (Q1 FY21), along with its Appendix 4C quarterly cash flow report.Commenting on the Company’s progress during the quarter, Nutritional Growth Solutions CEO Liron Fendell said:
“The start of 2021 has been instrumental for Nutritional Growth Solutions. Not only were we able to
achieve a record revenue result, we continued to expand our international footprint with our
scientifically formulated and clinically tested Healthy Height® brand, now available in five countries, including China and more recently, Italy.
“Implementing new sales channels, including our online flagship store on Tmall Global in China along with securing new, reputable distribution partners – Dicofarm in Italy and Medical Co-op Inc. in the US – will increase B2C and B2B sales in these regions and be a key revenue driver moving forward.
“We now turn our focus to increasing brand awareness and sales, and becoming the household name for trusted children’s growth support productsin these markets. In China, our partnership with leading multi-channel influencer network Yoola, allows us to leverage the power of influencers to generate mass brand awareness over time and place consumers on a path to purchase. Along with our recently formed partnership with social media sensation and much-loved celebrity, Gavin Thomas, this will ensure we are well placed to achieve our mission.
“Lastly, we have secured trademarks in both China and Korea, ensuring our brand is protected to the same high standard as our formula in these regions. The trademarks also open doors to further
develop relationships with reputable distributors, retail outlets and stockists, and most importantly,
provide consumers with confidence that they are receiving a genuine product that’s filled with
nutrients, backed by science and clinically proven to improve height in children.”
OPERATIONAL UPDATE
Nutritional Growth Solutions remained focused on growing the Healthy Height® brand distribution in Q1 2021 by expanding the product’s international footprint into two new markets, China and Europe, and securing trademarks in China and Korea.
Launch of Healthy Height® in China and flagship store on Tmall Global Healthy Height® is now selling in China after the official launch of the Nutritional Growth Solutions flagship store on Tmall Global, which is Alibaba’s B2C cross-border marketplace for foreign brands and merchants to sell directly to more than half a billion consumers on Alibaba’s platform in China. To support the launch, NGS partnered with leading multi-channel influencer network, Yoola, to leverage the power of influencers to generate mass brand awareness and drive traffic to purchase Healthy Height®.
Brand ambassador partnership with Gavin Thomas
Leading child celebrity and social media influencer Gavin Thomas will promote Healthy Height® in
China and through his massive social media following, after signing an agreement with NGS in
February.
Ten-year-old Gavin Thomas, from Minneapolis in the United States, is a famous and much-loved
internet celebrity in China known as the “fake smile boy”. GIFs featuring Gavin Thomas have been
used more than a billion times across various social media platforms in China, he has more than 8
million followers on social media platforms, has graced the cover of China’s edition of ELLE Magazine, has been a special guest at Chinese technology conventions, and is the youngest recipient of the Weibo Influencer Award (Weibo is a Chinese social media platform).
Gavin Thomas will promote NGS’ Healthy Height® product range in China through various social media campaigns, physical appearances and associated brand ambassador activity, predominantly to drive traffic to NGS’s cross-border e-commerce flagship store on Tmall Global.
Healthy Height® launch in Europe
March saw the launch of Healthy Height® into the EU following a three-year exclusive distribution with Italian product distributor, Dicofarm. With 44 years’ experience distributing clinically tested products, Dicofarm will supply Healthy Height® to pharmacies and health food stores throughout Italy and speak to the product’s scientific formulation and clinically proven benefits.
Trademark approval in China
In April, after this reporting period, Nutritional Growth Solutions secured the right to the Healthy Daily Height® trademark in China. This allows NGS to register its brand in China under a Class 5 trademark which includes pharmaceuticals, dietary supplements and food for babies, enabling NGS to better protect and enforce its intellectual property rights against imitation products and develop
relationships with reputable distributors, retail outlets and stockists.
The Healthy Daily Height® trademark ensures customers can shop confidently for the NGS’ patented range of nutritious shakes, knowing they are receiving genuine products that have been clinically tested and scientifically formulated with the highest quality ingredients.
FINANCIAL OVERVIEW
NGS achieved a record quarterly revenue result of US$810k, up 76% on the previous corresponding
period. This revenue results reflects substantial growth in all geographies.
Net cash used in operating activities of US$1.1M for the quarter included:
US $694K receipts from customers;
US$763K advertising and marketing costs;
US$91K in research and development costs;
US$562K in product manufacturing and operating costs in response to increased actual and
forecast demand; and
US $382K for administration and corporate costs.
The Company’s cash balance as at 31 March 2021 is US$3.402 million, providing flexibility for NGS to execute its growth plans.
Payments made to related parties and their associates shown in the Appendix 4C are as follows:
Item 6.1 consists of $47k director’s fees and $131k payroll expenses
ASX Additional Information
Pursuant to ASX Listing Rule 4.7C.2, NGS provides the following comparison of its actual expenditure since admission to ASX (being 30 October 2020) against the total “use of funds” statement in its Prospectus dated 14 September 2020.
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