TPI provides its latest research note on DeepVerge plc (DVRG.L)

DeepVerge’s consumer skin test subsidiary brand, Skin Trust Club, has announced further significant growth of its platform. Since mid-January, 10 leading skincare manufacturers have enlisted on the Skin Trust App marketplace to sell their skincare product catalogues, including Tula, a recently acquired brand of Procter & Gamble.

With a total of 23 Labskin clients requesting to have their products tested in just the past four months, the Club’s full partners list can be expected to continue to expand throughout 2022. Moreover, given that an exceptional 82% of registered Club members (>1,500) who received Home Test Kit results since the marketplace opened subsequently purchased ‘high ticket’ recommended skincare products via the Skin Trust Club App, which realistically can be expected to enjoy a wholesale margin similar to, for example, the 48% enjoyed by leading health & beauty retailer, Boots UK Limited, the long-term value of the recurring revenue streams generated through this unique service could become very significant.

This news reinforces TPI’s confidence in the ambitious forecasts and valuation that it published back on 3 August 2021, suggesting a target price for the Group, which presently trades at less than 7.5x its 2022E EBITDA multiple, of 94.7p/share.

(Please note that TPI’s valuation is based on financial modelling and there is no guarantee that such a valuation will ever be realised, therefore please do not base investment decisions on this valuation alone. Also please note that past performance is not a reliable indicator of future results.)

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We would draw your attention to the various disclaimers in the document both at the beginning and at the end of the note. Retail clients (as defined by the rules of the FCA) must not rely on the research document. In particular you should note that the research document is a non-independent marketing communication. The analyst who has prepared the research is aware that TPI provides research to DeepVerge plc. Accordingly the research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibitions on dealing ahead of its dissemination.

The information in the document is published solely for information purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The material contained in the document is general information intended for recipients who understand the risks associated with equity investment in smaller companies. It does not constitute a personal recommendation as defined by the FCA or take into account the particular investment objectives, financial situation or needs of individual investors nor provide any indication as to whether an investment, a course of action or the associated risks are suitable for the recipient.

Copyright © 2022 Turner Pope Investments (TPI) Limited, all rights reserved.

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