Novacyt hoists revenue and reduces pre-tax losses
Clinical diagnostics specialist Novacyt, quoted in London and Paris, hoisted revenue and cut post-tax losses in the year to December 31. The group owns Lab21 in Cambridge.
Revenue increased to £13.72 million from from £12.749m while the post-tax loss was reduced from £3.491m to £2.112m.
CEO Graham Mullis said Novacyt delivered material financial and operational progress as it focused on integrating the Omega Infectious Diseases business unit acquired in June and undertook a strategic review resulting in the decision to sell the NOVAprep® business unit.
Novacyt took the decision to focus on its core and more profitable reagent diagnostic product development manufacturing units of Primerdesign and Lab21. This core continuing business delivered sales growth of nine per cent at CER, improved gross margin of 63 per cent and adjusted EBITDA profitability.
Sales momentum continued in the second half, up seven per cent year-on-year to €7.3m and up 13 per cent on the first half. Novacyt ended the year with €1.1m (£1m) in cash.
Lab21 revenues were €7.5m (£6.6m), up 14 per cent on 2017 at CER, mainly reflecting the acquisition of Omega ID which accounted for 13 per cent of the year-on-year growth. Lab21 has €1.0m of confirmed tender orders received at the end of 2018 which will now be completed in 2019. As part of its strategic review, Novacyt previously decided to sell the Clinical Lab business based in Cambridge as it is now considered non-core.
The company says that solid progress is being made in the sale of this business and management expects to update the market by the end of Q2.
Mullis said: “The group made good operational progress over the course of 2018, continuing its growth trajectory and R & D development. “We remain committed to our three strategic growth pillars with the delivery of strong organic sales growth from Primerdesign and Lab21 and the recent launch of our CE-Mark approved molecular products, the genesig® BKV Kit and genesig® EBV Kit.
“We have begun to see the full benefit from the acquisition of the Infectious Disease Business from Omega Diagnostics Plc., which, has contributed to EBITDA profitability in the first six months of ownership and further significant synergies in respect of sales channels, overheads and direct costs are anticipated.
“The group, on a continued operations basis, is now EBITDA profitable and we aim to build on the operational progress made in 2018 to continue to deliver double-digit revenue growth from this base, further increase margins with the medium target to become self-sustainable on a free cash-flow basis and look at the potential for further acquisitions.
“On April 23 we announced the completion of an up to €5m financing facility which will enable management to drive the business forward knowing there is sufficient working capital to support growth.
“The business has started well operationally in 2019 and, with the new financing now in place, management can fully focus on the business which we expect to see the benefit of in the second half of the year.”