Novacyt S.A. (“Novacyt”, the “Company” or the “Group”): Half Year 2021 Results

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PARIS & CAMBERLEY, England–(BUSINESS WIRE)–Regulatory News:

Novacyt (EURONEXT GROWTH: ALNOV; AIM: NCYT), an international specialist in clinical diagnostics, announces its unaudited results for the half year ended 30 June 2021.

Graham Mullis, Group CEO of Novacyt, commented:

“During 2021, Novacyt has remained at the forefront in its response to the constantly changing global COVID-19 pandemic. We have launched 18 new COVID-19 products since the beginning of 2021 and we expect Novacyt to continue to play a major role in COVID-19 testing well into 2022. We also remain focused on strengthening our long-term position and executing against our strategy by building our product and instrument platforms and expanding our commercial infrastructure for growth beyond COVID-19.

“As my last results as CEO of Novacyt, I would like to take this opportunity to say it has been a privilege and an honour to lead the Company and to work alongside so many talented people who have worked tirelessly in the face of the unprecedented pandemic. I believe Novacyt is better positioned today than it has ever been, based on the capabilities it has developed over the last few years. I am immensely proud of what we have achieved, and I am confident the Company will continue to grow and cement its place as a leading global diagnostics player.”

Financial highlights

  • Group consolidated unaudited revenue of £54.0m (H1 2020: £63.3m) excluding £40.8m of H1 DHSC revenues whilst the contract dispute continues
  • Non-DHSC revenue increased by 20% to £54.0m (H1 2020: £44.8m) supported by growing UK private testing market
  • The Group has booked exceptional cost of sales of £35.8m in connection with the DHSC contract dispute to write down inventory and terminate supply agreements that the Company had built in anticipation of further DHSC demand and to book the cost of products supplied to the DHSC in 2021 that have not been paid for
  • Group gross margin before exceptional items was 71%, delivering a gross profit of £38.0m. After the exceptional DHSC related cost of sales, gross margin drops to 4%, delivering a gross profit of £2.3m
  • Group adjusted EBITDA of £23.2m before exceptionals (H1 2020: £43.1m)
  • Operating loss of £13.6m compared to a profit of £42.2m in H1 2020, driven by the one-time exceptional cost of sales and stock write-down
  • Loss after tax of £12.7m compared to a profit of £35.1m in H1 2020
  • Cash at 30 June 2021 of £77.2m with zero debt

     

£’000

H1 2021

Before

Exceptionals

H1 2021

After

Exceptionals

H1 2021

Total

Group

H1 2020

Total

Group

 

 

 

 

 

Revenue

53,950

53,950

63,257

 

 

 

 

 

Gross profit

38,044

(35,770)

2,274

52,673

Gross profit %

71%

 

4%

83%

 

 

 

 

 

EBITDA

23,170

(35,770)

(12,600)

43,146

EBITDA %

43%

 

-23%

68%

 

 

 

 

 

Recurring operating (loss) / profit

22,232

(35,770)

(13,538)

42,540

 

 

 

 

 

Operating (loss) / profit

22,169

(35,770)

(13,601)

42,236

 

 

 

 

 

(Loss) / profit after tax attributable to the owners

16,299

(28,974)

(12,675)

35,131

Operational highlights

  • Rapid development and launch of 18 new assays to support laboratories, clinicians, and private testing for COVID-19 since the beginning of 2021

    • Launch and continued expansion of PCR genotyping portfolio, SNPsig®, to detect variants of SARS-CoV-2, including VariPLEX™ to detect six key mutations in a single test

      • Portfolio included in the NHS England Framework for detecting Variants of Concern
    • Expansion of PROmate® COVID-19 PCR portfolio for workflow efficiency in a near-to-patient setting
    • Expansion of genesig® COVID-19 PCR portfolio
    • Expansion of PathFlow® LFT portfolio with antibody and antigen tests for COVID-19
  • Launch of VersaLab™ mobile processing laboratories and VersaLab™ Portable to expand near-patient testing opportunities in private sector testing
  • Inclusion in PHE National Framework Agreement, resulting in a new contract with the DHSC for the supply of PROmate® COVID-19 tests to the NHS (post period)
  • Secured new contracts with WHO and UNICEF for the supply of COVID-19 products
  • Strengthened executive team and commercial operations to support future growth

    • Appointment of James McCarthy as Chief Financial Officer
    • Anthony Dyer assumed a new role of Chief Corporate Development Officer to focus on business development
    • Appointment of Guillermo Raimondo to newly formed role of Chief Commercial Officer to lead global commercial operations
    • Appointment of US General Manager and set-up of Novacyt US Inc
  • David Allmond appointed as Chief Executive Officer, effective from 18 October 2021, following Graham Mullis’ decision to retire (post period)

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

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 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

Chief Executive Officer’s Review

Continued strong momentum in H1 2021

Novacyt has continued to experience strong demand for its COVID-19 products during 2021, following its early mover advantage in 2020 and continued innovation, strengthening the Company’s reputation as a global clinical diagnostics player. This has been demonstrated by the launch of 18 new products since the beginning of 2021 and the generation of £54.0m in revenues from customers, excluding the DHSC.

Novacyt has continued to drive revenue growth from new customers, particularly in private testing markets which is expected to be a key part of the Company’s future success. Alongside strong sales into private testing in markets, such as the UK and Germany, the Company secured, post-period, new or extended supply contracts with non-governmental organisations, including with the World Health Organization (WHO) for the supply of its genesig® COVID-19 tests and UNICEF, where the Company has received confirmation that its existing Long-Term Agreement with the organisation has been extended by 12 months to July 2022. The Group has also signed a new contract with the DHSC under the PHE National Microbiology Framework, as announced on 18 August 2021, for the supply of PROmate® COVID-19 tests to the NHS until 31 March 2022.

In H1 2021, the Group delivered revenue of £54.0m, excluding DHSC revenue, compared to total group revenue of £63.3m in H1 2020. Excluding H1 2020 DHSC revenue, the Group delivered 20% year-on-year revenue growth. Group gross margin before exceptional items was 71%, delivering a gross profit of £38.0m and EBITDA, excluding exceptional charges, was £23.2m compared to £43.1m last year. The Group finished H1 2021 with £77.2m of cash and zero debt. This strong underlying financial performance provides the Company with a solid foundation as it continues to grow the business in line with the updated strategy, as announced at the time of the Company’s full year results on 22 June 2021.

As announced on 22 June 2021, the Company is focused on key areas of test menu, instrument, and geographic expansion. The test portfolio expansion in COVID-19 and beyond COVID-19 will be achieved by leveraging the Company’s strong bioinformatics and design expertise. With instruments, the Company is focused on improving capabilities in near-patient testing and offering full work-flow solutions which will include extraction and sample handling automation. Expanding the geographic footprint will be helped by selective investment in key countries and by leveraging the international relationships and reputation Novacyt has built up over the last 18 months.

Novacyt has continued to make good progress in these areas during H1 2021, including expansion of the Company’s respiratory portfolio for COVID-19 testing combined with a growing patent portfolio, expansion of VersaLab™ to provide further near-patient testing solutions in the private sector, and expansion and establishment of the Company’s commercial infrastructure in the UK and the US, respectively. This growth has been supported by a strengthened leadership team during the period.

Novacyt is well-positioned to continue its trajectory towards becoming a leading global diagnostics player

Novacyt is building upon its reputation for the innovation and high performance of its diagnostic products and believes it is well positioned as a global manufacturer rapidly developing and commercialising market leading and proprietary technologies in high value and growing markets. This confidence stems from the key competitive advantages the Company has established over a number of years and validated during Novacyt’s successful response to the COVID-19 pandemic.

These features of the Novacyt business include:

Market leading molecular diagnostics development capability

  • A leading development capability of in-vitro diagnostics which enables Novacyt to design, prototype, develop and optimize PCR tests rapidly and deliver best-in-class clinical performance. Consequently, Novacyt has been at the forefront of a number of global disease responses, including Zika, Ebola, SARS and now COVID-19
  • This includes a proprietary and automated bioinformatics capability which enables the Company to…

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