TIDMEKF
RNS Number : 3158D
EKF Diagnostics Holdings PLC
28 January 2015
EKF Diagnostics Holdings plc
("EKF", the "Company")
Trading update
EKF Diagnostics Holdings plc (AIM: EKF), the AIM listed
point-of-care, central laboratory and molecular diagnostics
business, provides the following trading update for the year ended
31 December 2014.
Trading for year ended 31 December 2014
As previously announced on 17 December 2014, the business made
substantial progress in the second half of last year and has
established a solid platform for further growth in 2015.
The Company now expects results for the year ended 31 December
2014 to be at the higher end of previous management guidance, with
unaudited revenues of around GBP40.1m, a 26% improvement on the
previous year (2013: GBP31.8m) despite revenues being impacted
negatively by exchange rate differences of GBP2.6m. Unaudited
adjusted EBITDA is expected to be up 31% to GBP6.3m (2013:
GBP4.8m).
These results reflect the strong performance of the business in
the second half with H2 2014 revenue of GBP23.3m, up 38% against
the same period in 2013, and a 39% improvement on the previous
half, H1 2014. Underlying organic revenues accounted for GBP33.6m
of total revenues which represented 6% organic growth
year-on-year.
The point of care business continues to perform well, with
growth being seen across most products. In particular, QuoLab
instrument sales are expected to be up more than 30% on the
previous year, production being able to meet strong demand
following the successful transfer of manufacturing to our Barleben
facility, and Biosen instrument sales are expected to show an
increase of more than 25% on the previous year, mainly due to
strong growth in Asia.
The unaudited cash position at 31 December 2014 was GBP8.3m, and
the net cash position was GBP2.4m (30 June 2014: net cash of
GBP5.2m). Total unaudited trade debtors at 31 December amounted to
GBP12.0m (2013: GBP4.8m) reflecting a strong final month and
quarter.
As highlighted above, the trading year ended well, with the
Company recording a particularly strong December due to an
increasing monthly contribution from the acquisitions made during
the year. Overall, acquisitions contributed GBP6.4m to revenues.
Selah contributed GBP3.0m to full year revenues and is beginning to
gain traction, particularly with its DME panel as well as through
the launch of additional testing services. Selah recorded sales of
GBP0.8m in December, its best monthly performance to date under EKF
ownership, and the Company anticipates that this level of sales
will be exceeded in January 2015. This steadily increasing monthly
run-rate bodes well for the Company's ability to deliver continued
substantial growth through 2015 as a whole.
Whilst we had a slower than expected start from the
acquisitions, the progression to a monthly run rate more in line
with management's initial expectations is very encouraging. The
initial Selah purchase agreement was drafted to accommodate a
reduction in deferred consideration payments if certain performance
targets were not met; the lower than anticipated sales from Selah
is likely to result in the year 1 earn-out payment of $17.5m not
being payable. In addition and as announced on 5 January 2015, the
Company agreed to make a cash payment of GBP1.425m as final
settlement for the total deferred cash consideration due in
relation to the Diaspect acquisition, versus the maximum deferred
consideration which would have totalled GBP4.75m.
Selah's PrecisionPath(TM) service, which provides a range of
clinically validated biomarkers that can be used to design specific
personalised treatment plans for cancer patients, represents a huge
opportunity for growth and a major US pilot for profiling colon
cancer patients is progressing well. This has the potential to
become a very high margin reimbursable testing service and the
Company will keep shareholders updated as this progresses. Selah is
also in the final stages of agreeing a major collaboration which
could make the latest genetic sequencing for colon cancer available
to community doctors, allowing them to directly prescribe the most
effective treatments based on the patient's unique genetic make-up.
An update will be provided as this agreement is concluded.
The improved performance at Selah and the continued traction
that their testing panels are having with clinicians in the US is
very encouraging. The progress being made with PrecisionPath and
the continued development of the commercial offering of
PointMan(TM) provides the Company with confidence that 2015 will be
a very significant year for establishing the credentials of the EKF
Molecular Diagnostics division and a considerable generator of
shareholder value.
With the successful transfer of production of Quo-Test and
Quo-Lab instruments and reagents cartridges to the Barleben
manufacturing site and the closure of the Dublin site, the Company
expects to benefit from operational savings in the region of
GBP0.75m annually. In addition, work has now begun on expanding the
Barleben site which will provide increased production capacity. As
production levels rise the Company expects this to have an
additional positive impact on product margins, as well as creating
further overhead efficiency opportunities. The Company will also
continue to integrate the acquisitions made in 2014 and to exploit
cross-selling initiatives and cost efficiency opportunities.
Outlook
The Company remains confident of progress and growth in 2015,
both as a result of strong organic growth, and also through a full
year contribution from the three strategic acquisitions,
particularly the increasing monthly run-rate being generated
through Selah.
The Company continues to expect to see the benefits of revenues
from tender orders that were anticipated to complete before the
current year end. A number of new product launches have been
scheduled for 2015, alongside various product enhancements, and a
number of key geographic registrations are currently nearing
conclusion which will collectively help drive 2015 revenues.
Julian Baines, CEO of EKF, commented:"I am very pleased with the
revenue and earnings growth that we delivered during 2014. These
were well above the average growth rates for the IVD industry
although as a whole it fell short of our own ambitious growth
targets. I am particularly encouraged by our strong finish to the
year and the early signs that this momentum is carrying over into
2015. As we move forward into the new financial year, we believe we
can continue to grow the business well beyond the average growth
rates for the industry.
"The coming year has the potential to be a period of substantial
and sustained growth for EKF and the key to our success in 2015
will be built on the strong foundations laid in the final quarter
of 2014 in both our point of care and molecular divisions. As a
Board we are very mindful of the need to deliver against realistic
growth targets and, whilst we will remain dependent upon external
regulatory bodies, we will deliver and build shareholder value. It
is clear from Shareholder feedback that our focus this year should
remain on driving organic growth across the business and we have no
acquisition plans for 2015."
EKF will announce its preliminary results for the year ended 31
December 2014 on 16 March 2015.
Enquiries:
EKF Diagnostics Holdings plc Tel: 029 2071 0570
David Evans, Executive Chairman Mob: 07740 084 452
Julian Baines, CEO Mob: 07788 420 859
Paul Foulger, CFO Mob: 07710 989 255
Canaccord Genuity Limited Tel: 020 7523 8350
Nominated Adviser/Corporate
Broking
Lucy Tilley /Julian Feneley /Henry Fitzgerald-O'Connor
/Cara Griffiths
Walbrook PR Limited Tel: 020 7933 8780 or ekf@walbrookpr.com
Paul McManus Mob: 07980 541 893
Lianne Cawthorne Mob: 07584 391 303
About EKF Diagnostics Holdings plc - www.ekfdiagnostics.com
EKF Diagnostics Holdings plc was formed in July 2010 following
the acquisition of EKF-diagnostic GmbH for EUR14.32m and refocused
its strategy to one of building a substantial point of care
diagnostics business. As part of this strategy, the Group has
integrated three further acquisitions, Quotient Diagnostics Limited
(acquired in September 2010), Argutus Medical Limited (acquired in
December 2010) and Stanbio Laboratory L.P. (acquired in June 2011).
In 2013 EKF established a new subsidiary, EKF Molecular Diagnostics
Ltd, to focus on molecular and companion diagnostics and acquired
360 Genomics Ltd, a business that owns diagnostics technologies for
cancer gene detection.
The Company, with its head office in Cardiff and operations in
London, Germany, Poland, Russia, Ireland and the US, is a leading
diagnostics business, focussing on the development, production and
distribution of chemical reagents and analysers for the testing of
Glucose, Lactate, Haemoglobin, Haematocrit and HbA1c.
In March 2011 EKF entered into a distribution agreement with
Alere Inc ("Alere"), a global diagnostics company, under which
Alere was appointed the exclusive distributor of EKF's CLIA waived
Hemo Control device and cuvettes in the US, Canada and United
Kingdom. The device is distributed in the US under the name
HemoPoint H2.
In March 2014, EKF acquired Separation Technology, Inc., a
Florida based manufacturer of in vitro diagnostics devices for the
haematology testing market. In April 2014, EKF completed the
acquisitions of Selah Genomics Inc., a US based developer of
molecular diagnostics for personalised medicine and DiaSpect
Medical AB., a Swedish based manufacturer of point-of-care
haemoglobin analysers.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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