Novacyt flags strong full-year revenue growth
By Josh White
Date: Thursday 30 Jan 2025
(Sharecast News) - Novacyt reported strong revenue growth for 2024 in an update on Thursday, with unaudited statutory revenue reaching about £19.6m, an 85% increase from the prior year's £10.6m.
The AIM-traded firm said the growth was primarily driven by the acquisition of Yourgene Health, which contributed £15.3m in revenue.
However, Yourgene's sales were slightly lower than the prior year on a proforma basis, reflecting a decline in non-invasive prenatal testing (NIPT) services following the divestment of its Taiwan operations and a reduction in sequencing revenues from a key customer.
The company said it saw solid growth in its clinical and instrumentation businesses.
Reproductive health revenue increased 26% on a proforma basis, supported by strong demand in Australia.
Sales of Ranger Technology consumables rose 13%, contributing positively to gross margins.
Primer Design sales were stable at £4.3m, marking the end of a recent period of revenue decline.
Novacyt said it ended the year with a cash balance of £30.5m, down slightly from £32.9m in June, and remained debt-free.
The firm said it continued its efforts to streamline operations, completing the closure of its Eastleigh site and relocating Primer Design to its Manchester facility.
It also transferred all Ranger instrumentation and consumables manufacturing from Canada to the UK, consolidating operations to improve efficiency.
The board said those initiatives, along with the discontinuation of 16 instrumentation product lines, were expected to deliver £3m in annual EBITDA improvements and £5m in cost synergies from the Yourgene acquisition.
Novacyt said it made commercial progress across key markets, reporting that its upgraded IONA Nx NIPT workflow, capable of processing twice the number of samples per run, was launched alongside expanded customer engagement in Colombia and Kazakhstan.
In December, Novacyt introduced an mpox clade differentiation kit for surveillance and monitoring, though it did not expect material sales from this product in the near term.
It also launched new multiplex assays for gastrointestinal diseases in pets, and said it was enhancing its Primer Design route to market through e-commerce and distribution optimisation.
Regulatory efforts were advancing, with the Yourgene QST*R Base test under review for IVDR accreditation.
Novacyt said it had strengthened its research and development teams to support new product development, positioning the business for organic growth.
The company said it planned to launch a new Ranger Technology platform for long-read sequencing this year, adding that it was finalising its commercial rollout strategy.
Novacyt said it remained focussed on executing its long-term growth strategy, consolidating its operations, and delivering cost efficiencies.
It said it expected to report full-year results for 2024 in April.
"Whilst we have been highly focused on cost reduction, consolidation and product and services rationalisation during the year, I have also been very pleased to see the progress made across the group, particularly the growth achieved in our reproductive health business," said chief executive officer Lyn Rees.
"Despite a cautious instrumentation purchasing environment during the year, we have also seen healthy growth in our Ranger consumables sales, underlining the strength and utility of our Ranger Technology, and we hope to see the market for new capital purchases improving during 2025.
"We now have a firm foundation, including a strong revenue base on which we can build, and we look forward to setting out our comprehensive growth strategy later this year."
At 1127 GMT, shares in Novacyt were up 2.24% at 52.96p.
Reporting by Josh White for Sharecast.com.
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