Novacyt reports Revenue up 20x in ‘transformational year’
The London-listed international specialist in clinical diagnostics reported that revenue for FY20 had increased by over twentyfold to €311.6m (£277.0m) compared to €13.1m (£11.5m) for FY19. Its full-year gross margin was above 80%, compared with 64% in 2019.
As a result of ‘significant work, focus and innovation,’ the group said that the scale and financial performance of the business continued to accelerate during the second half of the year with £213.7m of revenue delivered in 2H20 compared to £63.3m delivered in 1H20.
EBITDA profitability for the full year came above £187m with 2H20 EBITDA above £143m compared to £43m in 1H20. The Company’s cash position as at 31 December 2020 was £91.8m, compared to £1.6m at 31 December 2019 and £18.0m as at 30 June 2020.
Strong sales and profit were driven by the continued successful global commercialisation of its COVID-19 product portfolio, underpinned by one of the world's first approved polymerase chain reaction (PCR) tests for the virus which was launched in September 2020.
The Group expanded its global presence, with the UK, Middle East, Germany and US being its four largest revenue generating markets, securing significant contracts with national governments, including two with the Department for Health and Social Care in the UK
Novacyt said it continues to leverage its proven capabilities in PCR test R&D to expand the range of high quality and differentiated products it offers to its customers, resulting in ten further product launches during the year to address new needs in the market.
Investors will be very familiar with the Novacyt equity story over the past 12 months, which represents the embodiment of trading the COVID-19 pandemic in 2020 and has understandably driven much of the interest in the Vox Markets COVID-19 Index over the past year.
Shares in Novacyt have soared by over 6,000% in value since the beginning of January 2020. However, Novacyt provides us a timely reminder that in is often better to trade expectations (the journey) than reality (the results), with the shares trading 10.91% lower today at 974.5p after reporting revenues increased over 20x.
To support growth, Novacyt continues to scale the business internally. During 2020, Novacyt hired 124 people, with significant increases across manufacturing, sales and R&D operations. Post period end, Novacyt also expanded its executive team with James McCarthy appointed as CFO to support the Company as it enters its next stage of growth.
"2020 has been transformational for Novacyt. We have cemented our early mover advantage of developing one of the first tests for COVID-19 into an established position within COVID-19 testing and the broader diagnostics market,” said Graham Mullis, Group CEO of Novacyt.
He added, “We have signed significant contracts with national governments, supplied our products to over 130 countries globally and continued to develop innovative testing capabilities to support laboratories and clinicians during these challenging times.”
Outlook
The Directors believe demand for Novacyt’s COVID-19 product portfolio will remain strong throughout most of 2021, with continued conversion of new opportunities, including a number of planned product launches, and the expansion of the Company's VersaLab™ service to support private sector testing of infectious diseases, initially focused on COVID-19.
With a strengthened cash position, Novacyt said it is able to continue to invest in innovation, organic expansion and external business development, in line with its growth strategy.
It will continue to invest in its commercial infrastructure to deliver new products while it establishes a direct sales force in key markets in the US and across Europe. It added that it continues to evaluate M&A opportunities and will consider additional bolt-on acquisitions.
Mullis added, “These foundations ensure we are well positioned to continue to grow the business in line with our strategy of delivering long-term value to our shareholders.
The Company expects to announce its full year results in April 2021.
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