The Skin Elements share price has surged by 9% today following the company’s announcement it has entered into a distribution agreement.
The post Skin Elements (ASX:SKN) share price climbs 9% today. Here’s why appeared first on The Motley Fool Australia. –
Skin Elements Ltd (ASX: SKN) shares are surging higher today following the company’s announcement it has entered into a distribution agreement that would see its products sold and marketed online. At the time of writing, the Skin Elements share price is trading 8.57% higher at 7.6 cents.
In earlier trade, Skin Elements shares climbed by as much as 10% before retreating to their current level.
What’s moving the Skin Elements share price?
The Skin Elements share price is on the move after the company reported it has entered into an agreement with West Coast Naturals Pty Ltd. The agreement relates to the online sales of Skin Elements’ SE Formula range of organic health care and beauty products.
According to the release, West Coast Naturals is an Australasian business specialising in the sale of natural and organic health brands through its e-commerce platform, www.westcoastnaturals.com.au.
The platform specialises in a range of curated all-Australian natural health and beauty products sold directly to consumers globally, with a particular focus on South East Asia.
West Coast Naturals will offer Skin Elements an end-to-end e-commerce solution and access to West Coast Naturals’ digital platform currently in development.
The aim is to build meaningful scale for Skin Elements’ SE Formula brand portfolio across Australia and Asia. The collaboration will initially target three priority markets of Australia, Singapore and Hong Kong.
The agreement is for an initial term of three years, with no minimum sales commitment in the first twelve months. Skin Elements and West Coast Naturals will negotiate and agree minimum sales commitments for the second and third 12-month period.
New e-commerce platform
Skin Elements notes that West Coast Naturals has only recently been established, and has not yet achieved sales through its e-commerce platform which is currently in development.
The company says investors should be aware there can be no guarantee Skin Elements will achieve increased sales through this agreement.
Skin Elements executive chairman Mr Peter Malone remains optimistic, saying, “The distribution agreement with West Coast Naturals provides Skin Elements with further opportunity to expand our presence in Australia and Asia, which show strong demand for organic and toxin free health and beauty products.”
About the Skin Elements share price
The skincare company has been making progress recently. Two weeks ago, it acquired 40% of Sambora for $850,000.
Sambora owns BeachToes, which is an Australian-made range of cruelty-free, natural nail polishes formulated to maintain quality and colour.
The Skin Elements share price has shot up by over 650% in 2020, having started the year at 1 cent. It is however, still a long way off from its 52-week high of 12.5 cents.
The company commands a market capitalisation of $23 million.
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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.