TIDMEKF
RNS Number : 1702H
EKF Diagnostics Holdings PLC
26 July 2023
This announcement contains inside information
for the purposes of UK Market Abuse Regulation.
EKF Diagnostics Holdings plc
("EKF" or the "Company")
Trading Update
H1 2023 performance in-line with management expectations
EKF Diagnostics Holdings plc (AIM: EKF), the AIM-listed global
diagnostics business, provides an unaudited trading update for the
six months ended 30 June 2023 ("H1 2023"), a period of continued
growth in Point-of-Care and good progress in the Life Sciences
fermentation capacity expansion.
Trading Update
Trading in the first hal f of 2023 remained in line with Board
expectations. Following the disposal of the ADL Health business and
closure of UK Contract Manufacturing, H1 2023 revenues from
continuing operations were GBP26.3m (H1 2022 adjusted: GBP34.4m).
Excluding all COVID-related revenues, H1 2023 delivered GBP25.4m of
revenues from continuing operations compared to GBP22.7m in H1
2022. As outlined in the 17 May 2023 AGM statement, the Company
expects its overall financial performance this year to be more
H2-weighted than historically.
The positive momentum across Point-of-Care has been maintained
throughout the first half with sales up nearly 10% on the same
period last year, driven by a strong sales performance from
DiaSpect Tm, EKF's palm-sized haemoglobin analyzer, as well as
growth from sales of both Quo-Lab and Quo-Test HbA1c analyzer
product lines.
Li fe Sciences, which now includes sales of <BETA>-HB
(Beta-Hydroxybutyrate), a reagent used to identify patients
suffering from diabetic ketoacidosis, delivered 13.1% year-on-year
sales growth, compared with last year, driven mainly by
<BETA>-HB sales. Good progress continues to be made to
increase the Company's fermentation capacity. All of the new
fermenting units are now on site and in the process of installation
and validation. The Company will provide a further update once
these are operational and generating revenue, which is expected to
commence in Q4 2023. Additional commercial arrangements for the
utilisation of this capacity are advancing and the Board remains
confident that this will be a source of significant growth from
2024 onwards.
The Company expects that improvements in adjusted EBITDA(1)
margin will begin to be seen in the second half, resulting in the
expected H2 weighting for full year adjusted EBITDA. H2 2023 will
also benefit from the effect of cost savings implemented in H1 over
the full six months. The full, annualised benefits of margin
improvements are then anticipated in FY 2024, particularly from the
higher margin contribution from Life Sciences once additional
capacity comes online and utilisation increases over the year.
Delivery of management's adjusted EBITDA expectations for this
year remains dependent on the timing and terms of new Life Sciences
contracts under discussion and expected to be signed as additional
capacity comes on line, as well as the continued growth in our core
Point-of-Care business, with better margins as the benefit of cost
savings and other improvements are observed.
Group cash, net of bank borrowings, was GBP6.73m as at 30 June
2023. This figure excludes cash held in Russia which totalled
GBP2.39m at the period end. EKF continues to supply essential
medical products to its 60%-owned Russian subsidiary, ensuring
continuous compliance with international sanctions based on regular
external expert advice. However, international sanctions mean that
the Company remains unable to distribute cash dividends from this
subsidiary and this situation is not expected to change in 2023.
The Board is exploring options available to realise the value tied
up in Russia and will provide a further update at the time of
publication of the Half-Year Results. In addition, the RUB/GBP
exchange rate is currently considerably less favourable than it was
in 2022 which will have an impact on translation, as will a less
favourable USD/GBP exchange rate across US revenues.
EKF expects to announce its unaudited results for H1 2023 on 26
September 2023, when it will provide further updates on current
trading and the outlook for 2023 and beyond.
Julian Baines, Executive Chair of EKF, commented: "We're pleased
with a solid first half performance, particularly given that 2023
remains very much a transitional year as we maintain our focus on
continued steady growth from our Point-of-Care division and the
expansion of our Life Sciences business. The full effect of the
improvements we've put in place, and the increased revenues from
our new Life Sciences capacity, are expected to have a more
beneficial effect on 2024 trading and we remain very excited about
the longer-term, significant growth prospects for the
business."
(1) Earnings before interest, tax, depreciation and
amortisation, excluding exceptional items and share based
payments.
The person responsible for arranging the release of this
Announcement
on behalf of the Company is Julian Baines, Executive Chair.
EKF Diagnostics Holdings plc www.ekfdiagnostics.com
Julian Baines, Executive Chair Tel: +44 (0)29 2071 0570
Singer Capital Markets (Nominated Adviser & Tel: +44 (0)20 7496 3000
Broker)
Aubrey Powell / George Tzimas / Oliver
Platts
Walbrook PR Limited Tel: +44 (0)20 7933 8780 or ekf@walbrookpr.com
Paul McManus / Lianne Applegarth Mob: +44 (0)7980 541 893 / +44 (0)7584 391
303
About EKF Diagnostics Holdings plc ( www.ekfdiagnostics.com
)
EKF is an AIM-listed global diagnostics business focussed
on:
-- Point-of-Care analysers in the key areas of Hematology and
Diabetes, as well as Central Laboratory products including clinical
chemistry reagents, analysers and centrifuges
-- Life Sciences services provide specialist manufacture of
enzymes and custom products for use in diagnostic, food and
industrial applications, as well as other higher value Contract
Manufacturing services
EKF has headquarters in Penarth (near Cardiff) and operates five
manufacturing sites across the US and Germany, selling into over
120 countries world-wide.
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END
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