TIDMNCYT
RNS Number : 1056H
Novacyt S.A.
30 July 2019
Novacyt S.A.
("Novacyt", the "Company" or the "Group")
Half-Year Trading Update
Group revenues up 12% to EUR7.2m
Paris, France and Camberley, UK - 30 July 2019 - Novacyt
(EURONEXT GROWTH: ALNOV; AIM: NCYT), an international specialist in
clinical diagnostics, announces an unaudited half year revenue
update for the six months ended 30 June 2019.
Unaudited revenues for the first half of 2019 were EUR7.2m
compared to the restated revenues for 2018 of EUR6.4m, with strong
growth from Primerdesign, the Group's molecular diagnostics
business. Continuing Group revenue excluding NOVAprep(R) ,
increased by 12% (11% CER) with peak sales of EUR1.4m for the month
of June at a Group level.
NOVAprep(R) revenues are excluded, reflecting the strategic
decision to sell the division, as announced on 11 December 2018,
which remains an ongoing process. Group revenue includes the
revenues of the Clinical Lab for the first half of the year which
has subsequently been sold, as announced on 18 July 2019.
Organic sales growth at Primerdesign
Primerdesign revenues increased by 7% to EUR3.3m compared to H1
2018 as a result of a 22% growth in B2B sales and continued growth
of 10% in international markets. Direct sales in the UK were down
by 6% due to the short-term impact of reorganising the sales
management structure with sales growth anticipated to resume
towards the end of the year. Sales in the Middle East and US
markets were the fastest growing regions for molecular products at
114% and 33% compared to H1 2018.
Acquisitive sales growth at Lab21
Lab21 revenue of EUR4.0m represents growth of 17% (16% CER)
driven by the acquisition of the infectious disease assets from
Omega Diagnostics which completed in June 2018. The second quarter
of 2019 saw sales restricted by a lack of working capital, as
reported on 30 April 2019, which mainly impacted the Lab21 business
unit. Despite this, the new sales team increased UK sales of
Microgen branded products by 29% compared to the first half of
2018. The order book remains strong for the second half of the year
and continued growth is expected depending on how quickly the
supply chain can be restored.
New Products
The molecular R&D pipeline of CE-Mark assays focused in
transplant diagnostics continues to make good progress and the two
new CE-Mark products EBV and BKV will launch in the second half of
the year as planned. The global transplant diagnostics market size
was valued at USD 579 million in 2018 and is forecast to expand at
a CAGR of 7.6% over the next 5 years(1) . Increasing organ
transplants are a major factor driving demand for diagnostics use
before clinical procedures.
This complements the rapid diagnostic BKV assay already launched
by Novacyt under the PathFlow(R) brand last June.
[1]
https://www.grandviewresearch.com/industry-analysis/transplant-diagnostic-market
During the second half of 2019, Novacyt plans to add other key
products to the rapid diagnostic PathFlow(R) range including
Clostridium difficile, Helicobacter pylori, Norovirus, Flu A/B and
Rotavirus/adenovirus. Further PathFlow(R) products will also be
announced later in the year which will complement the Novacyt
portfolio of rapid clinical diagnostics for infectious
diseases.
Restructure Update
As reported on 18 July 2019, the Company successfully sold its
Clinical Lab operations based in Cambridge, UK in an all cash deal
worth GBP400,000. Whilst the financial benefit of the sale was
relatively modest, it will enable the Group to focus on driving
growth and profitability from its core reagent manufacturing
business.
The Company continues to look for a buyer(s) of its NOVAprep(R)
business unit and has interest from China, the world's fastest
growing Liquid Based Cytology market used in cervical cancer
screening. As the sale process continues, the Company is taking
further steps to reduce the costs and cash burn of the unit. There
can be no certainty in a successful sale of the NOVAprep(R)
business and, in the event a sale does not occur, the operation
will be closed by the year end.
The Company is also considering how to maximize value from its
remaining non-core asset of animal health products which represents
5% of Group revenues. The options could include a sale of the
business as Novacyt is focused on human and food diagnostics and
does not intend to invest in another sales channel such as animal
health diagnostics.
Outlook
The performance of the Primerdesign and Lab21 businesses remains
strong entering the second half of the year. Both companies have
significant sales pipelines and expect sales to be higher than H1.
The Company expects to show increased adjusted EBITDA profitability
for the full year compared to 2018.
Graham Mullis, Group CEO of Novacyt, commented:
"The first half of 2019 has seen good operational performance
with solid growth from Primerdesign and Lab21 products. I am
pleased with the successful sale of the Clinical Lab, as it allows
us to further streamline and focus our operations. Whilst we
acknowledge shareholders will be unhappy with the short-term share
price performance, the Board remains excited and committed to
growing and developing our core diagnostic reagent business where
we see many opportunities. During the first half of 2019, despite
the working capital challenges, the Company produced a record sales
growth period and repaid over EUR1m of its principal debt balance.
Novacyt remains committed to its core strengths of in vitro
diagnostics product development, commercialisation and contract
manufacturing, and will continue to focus on driving value across
the Group."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
- End -
For further information, please refer to www.novacyt.com or
contact:
Novacyt SA
Graham Mullis, Chief Executive Officer
Anthony Dyer, Chief Financial Officer
+44 (0)1223 395472
SP Angel Corporate Finance LLP (Nominated Adviser and Joint
Broker)
Matthew Johnson / Jamie Spotswood (Corporate Finance)
Vadim Alexandre / Rob Rees (Corporate Broking)
+44 (0)20 3470 0470
WG Partners (Joint Broker)
Nigel Birks / Chris Lee / Claes Spång
+44 (0) 203 705 9330
FTI Consulting (International)
Brett Pollard / Victoria Foster Mitchell/ Mary Whittow
+44 (0)20 3727 1000
brett.pollard@fticonsulting.com/victoria.fostermitchell@fticonsulting.com/
Mary.whittow@fticonsulting.com
FTI Consulting (France)
Arnaud de Cheffontaines / Astrid Villette
+33 (0)147 03 69 47 / +33 (0)147 03 69 51
arnaud.decheffontaines@fticonsulting.com /
astrid.villette@fticonsulting.com
About Novacyt Group
The Novacyt Group is an international diagnostics business
generating an increasing portfolio of in vitro and molecular
diagnostic tests. Its core strengths lie in diagnostics product
development, commercialisation, contract design and manufacturing.
The Company's lead business units comprise of Primerdesign and
Lab21 Products, supplying an extensive range of high quality assays
and reagents worldwide. The Group directly serves oncology,
microbiology, haematology and serology markets as do its global
partners, which include major corporates.
For more information please refer to the website:
www.novacyt.com
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END
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