SILK Laser’s profit soars on high demand for cosmetic injectables

Cosmetic injectables lifted women’s spirits and ASX-listed beauty business SILK Laser’s fortunes over the busy spring and summer period.

SILK Laser Clinics chief executive Martin Perelman.

An 86 per cent increase in the sales of cosmetic injectables over the busy spring and summer period drove ASX-listed beauty business SILK Lasers Australia’s 305 per cent jump in first-half profit to $4.7m.

The group, which made its Australian share market debut on December 15, saw revenues soar 78 per cent to $31m, up from $17m in the previous corresponding period.

The results also boosted SILK’s expectations for a stronger than expected second half with underlying earnings expected to come in between $14m and $15m, compared to its $13.5m prospectus forecast.

Cash sales guidance has also been increased from $81m to come in within the range of $82m-$86m.

SA-headquartered SILK, backed by equity firm Advent Partners since 2018, also offers laser hair removal and other skin and body treatments across 56 clinics for predominantly females aged 20-49 with “40-plus busy mums the sweet spot”.

The boost in demand for injectables was attributed to increased investment in training and marketing, which was supported by “favourable consumer trends” as younger demographics increasingly see cosmetic injectables as a part of their regular anti-ageing and beauty routine.

The business has also pinned its hopes on a new body contouring service, EmSculpt – made famous by international celebrities Kim Kardashian, Jennifer Lopez and Drew Barrymore – following initial trials in July last year.

SILK is offering the EmSculpt body contouring treatment, made famous by singer Jennifer Lopez, seen here performing in Times Square during New Year's Eve celebrations on December 31, 2020. Photo: Gary Hershorn/Getty Images.

Valued at $216m, it is among Australia’s top three beauty treatment chains with private equity giant KKR-backed Laser Clinics Australia being the market leader, followed by Cleanskincare Clinics, owned by ASX-listed Australian Pharmaceutical Industries.

Established in 2009, SILK’s clinics are a mix of company-owned, joint venture and other franchise operations employing 460 staff.

Founder and chief executive Martin Perelman said the business, which was not significantly impacted by COVID-19 lockdowns, was in good health with growth across all categories.

“We are looking at organic growth and hope to open another four to six clinics by June 30 as we navigate potential lockdowns,” Mr Perelman said.

“While organic growth is a focus, mergers and acquisitions are also an opportunity.

“I am very proud of our first results delivered as a publicly-listed company, which is well positioned for a strong second half.”

SILK has a goal to grow to 150 clinics, mostly in the eastern states, in the next five to 10 years through a mix of acquisitions and new openings to increase its share of the national non-surgical market worth more than $5bn per year.

The group, which received $2m in JobKeeper and other government subsidies, had a net cash position of $25.7m, including funds raised for future investment through the public offer.

Shares closed more than five per cent higher at $4.53.