Release Date: September 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Successful resolution of the DHSC dispute resulted in a net cash inflow of over GBP7 million.
- Year-on-year revenue increased by GBP7 million to over GBP10 million, driven by the inclusion of Yourgene sales.
- Strong growth in key product areas: cystic fibrosis product growing at 30% and NIPT product at 12%.
- Achieved cost savings of GBP5 million, 18 months ahead of schedule.
- Cash position strengthened to GBP36.5 million by the end of August 2024.
Negative Points
- Reported a loss after tax of GBP17.7 million in H1 2024.
- EBITDA remained flat year-on-year at a loss of GBP5.6 million.
- OpEx increased to GBP32 million due to a GBP20 million bad debt provision.
- Revenue from the Ranger Technology segment slightly down year-on-year.
- Limited material news flow, leading to potential investor concerns.
Q & A Highlights
Q: What is your opportunity for Novacyt in monkeypox?
A: I still think it's early doors for monkeypox. There's a lot of talk and tenders out there at the moment. Existing research-use-only assays generated some revenues in July and August, but those numbers aren't material at the group level. The market is far more saturated compared to the COVID-19 pandemic, with lots of available products and vaccines. We are currently updating our assay to include the 1B strain, which seems to be the most dangerous and infectious strain. We will continue to monitor and assess whether there's enough demand to take this into a test for clinical use and get IVDR approval.
Q: When will the integration of Yourgene be complete?
A: The integration is largely complete now. We've refocused Primer Design back into the RUO market, eliminated duplicate corporate functions, and integrated all key operational departments. We've also rationalized our product and distributor networks. We are ahead of the curve on cost savings and expect to present a very clean cost line and clear growth expectations by H1 next year.
Q: Are you evaluating future M&A opportunities?
A: Not at the moment. Our current focus is on the strategic integration of Yourgene and Novacyt, investing in R&D to bring new products to market. We believe this organic growth story is sufficient for now. However, if an interesting opportunity arises, we would consider it.
Q: Would you consider a trade sale to a larger company?
A: Our focus is on growing the combined Novacyt and Yourgene business. However, if an opportunity comes along that is in the best interest of shareholders, we would consider it.
Q: When can we expect more detailed updates or small guidance?
A: We plan to provide more detailed updates and guidance in H1 next year. The new leadership team has been in place for just five months, and we are still working through our plans. We aim to present a clear understanding of our cost base, growth opportunities, and new product timelines by then.
Q: Can you provide an update on the progress of your RUO business and multiplex infectious disease products?
A: Our Primer Design business currently has about 1,200 assays. We launched a real-time PCR workflow for rapid on-site detection of norovirus, demonstrating our capability to provide point-of-care technology. We are also working on additional agriculture and veterinary products. We decided not to continue with the clinical side of this business to focus on the RUO market.
Q: What's the impact of your global demonstrations and training events?
A: These events are crucial for creating awareness and educating customers about our products. They have led to customer feedback, such as the request to add fragmentation analysis to our Ranger technology. These events help promote our products like NIPT, cystic fibrosis, and Ranger, contributing to our growth.
Q: Why is there a lack of news flow?
A: We can only announce material news. The new management team has been in place for just five months, and we are focused on integrating the businesses and protecting existing customers. We plan to come to market in H1 next year with a clear picture of our growth opportunities and new product timelines.
Q: Can you explain the reason for publishing the RNS for VAT reimbursement in the middle of the day?
A: We have multiple bank accounts, and once the team identified a large cash payment in the morning, we initiated the process to announce it. The announcement went through internal and external reviews and was published within about three hours of identifying the payment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
