Release Date: September 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- MyHealthChecked PLC (LSE:MHC, Financial) has sold over 55,000 wellness tests since launch, indicating strong initial market acceptance.
- The company has a significant partnership with Boots, enhancing its retail distribution and visibility.
- Investment in a digital platform is expected to underpin future growth opportunities and improve customer engagement.
- The company has achieved important compliance certifications, including ISO 13485 and 27001, ensuring high standards in quality and information security.
- MyHealthChecked PLC (LSE:MHC) has a strong cash position and effective cost management, allowing for self-funded growth and strategic investments.
Negative Points
- The company reported a gross margin loss of GBP286,000, attributed to lower-than-expected COVID test sales.
- Despite the initial success, the wellness testing category is still in its infancy, posing risks related to market maturity and customer adoption.
- There is a significant reliance on seasonal COVID-19 test sales, which may not be sustainable long-term.
- The company faces challenges in educating customers and driving trial in a new market category, requiring ongoing investment in marketing and PR.
- Uncertainty surrounds the contingent VAT reclaim of GBP1.67 million, which is not guaranteed and could impact future cash flow.
Q & A Highlights
Q: Can you provide more details on the performance of your wellness tests and the strategies that have driven their success?
A: Penelope Mccormick, CEO: We've sold over 55,000 wellness tests since launch, with a 37% increase in volume sales year-over-year. Our strategy has focused on building awareness and educating customers through retail partnerships, particularly with Boots. We've also invested in digital marketing and PR to drive conversion and credibility.
Q: How has the COVID-19 testing business performed, and what are your expectations moving forward?
A: Penelope Mccormick, CEO: Despite a 24% reduction in sales volumes compared to last year, demand remains strong. We've received orders for 3 million tests for the second half of this year. We expect COVID-19 to continue providing seasonal recurring revenue, supporting our fixed overheads and digital investments.
Q: What are the key takeaways from your marketing and customer engagement efforts?
A: Penelope Mccormick, CEO: We've focused on PR, Google paid ads, and retail point-of-sale investments. Our customer base is primarily aged 30-59 and predominantly female, which has influenced our marketing channels. We emphasize trust and customer feedback, maintaining a Trustpilot score of 4.4 with over 7,600 reviews.
Q: Can you elaborate on the new technologies and partnerships you're exploring?
A: Penelope Mccormick, CEO: We've partnered with PocDoc to introduce a microfluidic assay for heart health, providing results in nine minutes. This complements our existing offerings and aligns with our strategy to integrate new technologies into our digital platform, enhancing customer value and engagement.
Q: How are you managing your financials, particularly in terms of cash flow and investments?
A: Penelope Mccormick, CEO: We achieved revenue of GBP900,000 with a gross margin loss of GBP286,000, primarily due to lower COVID-19 test sales. However, we maintain a strong cash position, carefully managing working capital and costs. We've invested GBP193,000 in digital platform enhancements and are hopeful for a GBP1.67 million VAT rebate to further bolster our cash reserves.
Q: What are your future plans for expanding the wellness and testing business?
A: Penelope Mccormick, CEO: We plan to continue growing our wellness test offerings and exploring new technologies that enhance our range. Our digital platform will play a crucial role in connecting tests with additional services and products. We aim to expand our retail partnerships and optimize our platform for scalability and security.
Q: How do you ensure compliance and quality in your products and services?
A: Penelope Mccormick, CEO: We've achieved ISO 13485 for medical devices and ISO 27001 for information security management. We also hold Cyber Essentials Plus certification. These standards ensure our products and services meet the highest quality and security requirements, which is critical in the consumer healthcare space.
Q: What are the key highlights and challenges from the first half of 2024?
A: Penelope Mccormick, CEO: Key highlights include selling over 55,000 wellness tests, strong retail partnerships, and ongoing COVID-19 test demand. Challenges include managing the transition from high COVID-19 test sales to a broader wellness offering. We remain focused on strategic investments in our digital platform and exploring new technologies to drive future growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
