TIDMIDH
RNS Number : 6752E
Immunodiagnostic Systems Hldgs PLC
19 October 2018
H1 Trading Update
Immunodiagnostic Systems Holdings PLC
19 October 2018
Immunodiagnostic Systems Holdings plc
H1 Trading Update
Immunodiagnostic Systems Holdings PLC ("IDS" or "the Group"), a
specialist producer of manual and automated diagnostic testing kits
and instruments for the clinical and research markets, today
provides a trading update for the six months ended 30 September
2018 ("H1 FY19").
Unaudited Group revenues for H1 FY19 are expected to be
GBP18.5m, 1% lower than the same period last year. On a like for
like basis ("LFL"), that is at constant exchange rate and scope,
Group revenues were in line with the same period last year.
Revenue Performance in H1 FY19
The table below summarises the unaudited revenue performance of
the core segments of the Group. The right-hand column shows
developments in FY 2018 vs. FY 2017 to provide a view of the
underlying momentum.
Revenue LFL Change
H1 FY19 H1 FY19 v FY18 v FY17
H1 FY18
----------------------- ----------------------- -------------------------
Group GBP18.5m 0% -8%
----------------------- ----------------------- -------------------------
Automated Business GBP10.8m -6% 4%
----------------------- ----------------------- -------------------------
Automated 25-OH Vitamin
D GBP2.8m -12% -8%
----------------------- ----------------------- -------------------------
Speciality - IDS GBP6.7m -2% 5%
----------------------- ----------------------- -------------------------
Speciality - Partners GBP0.6m 17% 24%
----------------------- ----------------------- -------------------------
Instrument Sales and
Service GBP0.7m -26% 43%
----------------------- ----------------------- -------------------------
Manual Business GBP6.1m 2% -6%
----------------------- ----------------------- -------------------------
Technology Business GBP1.6m 51% -55%
----------------------- ----------------------- -------------------------
Automated business
Total automated revenue declined by 6% on a LFL basis, and is
driven by the same reasons announced previously - namely:
-- 25-OH Vitamin D revenue declined due to a reduction in 25-OH
Vitamin D assay volumes and analyser returns in the US.
-- Speciality- IDS revenues declined due to a small number of
machine returns from customers running one speciality assay.
Speciality - Partners revenue encompasses the sales of assays
developed by IDS's partners. During H1 FY19 we obtained CE marking
under the IDS brand for our Autoimmune and Infectious Disease assay
ranges, which in total comprise 51 assays. Revenue in this segment
grew by 17% on a LFL basis. We will target accelerating this growth
during the remainder of the year as we now have access to IDS
labelled product which we have the rights to sell on a global
basis.
The other KPIs in this business unit developed as follows:
a) Disappointingly we did not release any new endocrinology
assays in the period. We target the release of two or three new
assays during the second half of the year.
b) During H1 we placed or sold 15 machines (H1 FY18: 18) in our
direct sales territories. Returns in H1 in our direct sales
territories were 12 (H1 FY18: 9) meaning that in our direct sales
territories net new placements were 3 (H1 FY18: net placements of
9).
Within our distribution market we sold 13 (H1 FY18: 17)
instruments. There are no returns in this channel.
Thus total gross instrument sales/placements during H1 are 28
(H1 FY18: 35).
In terms of net new placements, our European business performed
well. We have substantially completed the rebuilding of our sales
team in Europe, and hence expect a stronger performance in Europe
during H2 FY19.
In the US, IDS continues to suffer from a limited menu of 10
FDA-approved assays. This makes it more difficult to renew analyser
placements at the end of their contract and win new customers
willing to invest in the space and process requirements for a new
instrument. In the period we have strengthened our regulatory
affairs team to accelerate our FDA registration process, which will
impact the medium-term performance of the region.
c) The average number of assays run per instrument increased to
4.8 (H1 FY18: 4.3), reflecting successful cross-selling
Manual business
The Manual business performed strongly in H1 FY19, exhibiting 2%
LFL growth, after several years of decline. During H1 FY19 the new
business unit commercial team have been successfully reactivating
dormant accounts and adding distributors in new territories. We
hope to maintain this momentum during the second half of the
year.
Technology business
LFL growth in the Technology business of 51%, from a low revenue
level, is driven by large volume orders for analysers by one OEM
partner, as they prepare for the commercial launch of their
automated menu. As communicated previously, short term revenues in
this business unit will be dependent on the success of this OEM
partner's product launch.
Financials
Gross margin during H1 FY19 will be lower than previous periods,
due to the mix change in the IDS business. Within both our
Automated and Manual business units, a greater proportion of our
sales come via distribution channels, which have a lower margin
than our direct sales channels. Similarly, we have seen a greater
proportion of sales in our Technology business, which has lower
gross margins than our assay businesses.
Closing cash and cash equivalents were GBP27.8m at 30 September
2018 (30 September 2017: 29.7m, 31 March 2018: GBP28.5m). Free cash
flow, being cash flow before returns to shareholders, was GBP1.1m
(FY18 H1: -GBP0.6m).
HR and Corporate Culture
At 30 September 2018 the Group employed 286 people on a
full-time employment basis (30 September 2017: 287 persons, 31
March 2018: 281 persons).
We have continued our focus on improving the results delivered
by our team. The corporate values which were introduced in the
previous year are becoming part of our day to day lives, and
further progress has been made in embedding our leadership
principles into our global management team via a series of group
workshops and one-on-one mentoring. We have put in place career
development plans to motivate and retain our top team members.
Outlook
Our target for FY 2019 continues to be returning the business to
revenue growth on a LFL basis, for the first time since FY14. We
aim to achieve this primarily through growth of our Manual
business, additional sales of automated products via distributors,
and accelerated growth of our Autoimmune and Infectious Disease
panels. However these gains will be offset by an anticipated
decline in our US business. Nevertheless, with the significant
effort being put in by the team at IDS, we maintain this revenue
guidance.
For further information:
Immunodiagnostic Systems Holdings plc Tel : +44 (0)191 5190660
Jaap Stuut, Chief Executive Officer
Paul Martin, Group Finance Director
Peel Hunt LLP Tel : +44 (0)207 418 8900
James Steel
Oliver Jackson
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London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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