TIDMIDH
RNS Number : 6835L
Immunodiagnostic Systems Hldgs PLC
20 April 2018
Trading Update
Immunodiagnostic Systems Holdings PLC
20 April 2018
Immunodiagnostic Systems Holdings PLC
Trading update for the year ended 31 March 2018 and change of
Non-Executive Directorate
Immunodiagnostic Systems Holdings PLC ("the Group"), a
specialist producer of manual and automated diagnostic testing kits
and instruments for the clinical market, today provides a trading
update for the financial year ended 31 March 2018 ("FY18").
Unaudited Group revenue is expected to be approximately
GBP37.9m, a decrease of 5% on the previous year (and a decline of
8% at constant exchange rates "CER"). The majority of the decline
was due to the loss of royalty income from a major customer, as
communicated previously. Revenues in the Laboratory business
(comprising the Automated and Manual business units) are expected
to be GBP35.2m, unchanged on the previous year at CER, with growth
in the automated business offsetting declines in the manual
business.
1. Automated Business
Revenues in our automated CLIA business are expected to be
approximately GBP22.9m, 4% higher than FY17 at CER (compared to 3%
growth in FY17 v FY16). An overview of the key revenue streams in
this business is set out below:
-- Automated 25OH Vitamin D revenue of approximately GBP6.3m
represents a decline of around 9% at CER
compared to the prior year. The rate of this decline is lower than seen in previous years.
-- Automated Speciality Endocrinology revenue of approximately
GBP13.6m represents a growth of around 5% at CER compared to the
prior year.
-- Automated Autoimmune and Infectious Disease revenue of
approximately GBP1.0m represents growth of 24% at CER. As
previously announced, we have reached agreement with Technogenetics
SRL to enable IDS to sell their range of circa fifty autoimmune
("AI") and infectious disease ("ID") assays globally. We expect all
of these assays will be available under the IDS brand by
autumn.
During the year IDS launched three new automated assays for the
IDS analyzer. Combined with the IDS branded AI and ID offering, we
now have a CE marked automated assay panel of 72 assays, 22 of
which are produced by IDS (FY17 : 19). The assay menu in the US and
China remains unchanged compared to the previous year, at ten and
four respectively.
Annual gross placements of analysers in markets with direct
sales organizations were 34 (FY17: 40). The number of returns were
25 (FY17: 24), meaning net placements in the year were 9 (FY17:
16). Gross placements of 16 during H2 FY18 were disappointing,
being lower than the 18 achieved in H1. This was mainly due to a
high staff and management turnover in one region. We have been able
to fill most of these positions by now and therefore expect gross
new placements of analysers to resume growth again.
In contrast to our direct sales business, our distribution
business performed strongly, with sales of 36 analysers in the year
(FY17: 12). This strong performance puts IDS in a good position to
grow distribution revenue during FY19.
The average number of assays run on an IDS analyser increased to
4.7 (FY17: 4.3) which reflects the upselling activities performed
by the sales organisation. The increase in this metric demonstrates
that IDS analysers are becoming more widely used within our
laboratory customers, which gives us increased confidence that
contracts will more likely be renewed at the end of their term.
2. Manual Business
Manual assay revenues are expected to be approximately GBP12.4m,
6% lower than FY17 at CER (FY17vFY16: 11% decline). The rate of
decline has slowed due to a strong performance in our Diametra
business, which offset the continued declines in the legacy IDS
Manual business.
During H2 FY18 we completed the recruitment of the Manual
business unit commercial team. The new team has already developed a
pipeline of OEM sales opportunities, as well as being at advanced
negotiations to on-board at least 10 new distributors. We
anticipate that we will start to see the financial benefit of these
actions during H2 FY19.
3. Licensing and Technology Business
Licensing and Technology revenues are expected to be
approximately GBP2.7m, a decline of around 55% at CER compared to
the prior year. The majority of the decline is due to the loss in
royalty income from one major customer, as announced in June 2016.
Revenues from this customer were GBP2.8m in the prior year, but are
minimal during FY18. Thus moving forward this issue will no longer
drag down the overall group growth rates.
4. Other Metrics
As of 31 March 2018 the Group employed 281 staff and contractors
on a full time employment basis (31 March 2017: 284).
Closing cash and cash equivalents are expected to be around
GBP28.5m (31 March 2017: GBP31.5m).
5. Board Changes
Till Campe informed the Company today that he will step down
from the Board, effective from 30 June 2018, to focus on his
activities at Forum Family Office. The Board would like to thank
Till for his contributions during his time with IDS, particularly
in relation to our corporate development efforts.
6. Automated Business - New Allergy Products
We are pleased to announce that we have recently signed an
exclusive agreement to distribute globally 51 allergy assays which
have been developed by our partner, Omega Diagnostics. These assays
will be branded as IDS Allersys.
We only anticipate modest revenues from these assays in the next
1 - 2 years, as a much larger panel of assays, and related
screening tests, are required to place new analyzers in labs with a
focus on allergy testing. The incumbent providers feature menus
with over 100 tests. Revenues in the next couple of years will thus
largely be limited to upsells into the existing IDS analyzer
installations. Encouragingly feedback from initial trials is that
the IDS / Omega solution is more flexible and easy to use than
existing systems available for small to mid-size laboratories.
7. Outlook
Within our Automated business we still have a number of actions
to undertake to strengthen our direct sales team, which we aim to
complete during the first quarter of FY19. This is vital to allow
us to accelerate the number of gross analyser placements, and
accelerate the disappointing growth levels we witnessed in our
Specialty Endocrinology business. We are encouraged by the
performance of our distribution business in FY18. We will deploy
additional resources in this area if necessary to capitalise on
this growth opportunity. Finally the potential presented as a
result of the deal with Technogenetics is very exciting. Our
combined AI and Endocrinology panel, coupled with the ease of use
of the IDS analyser platform, give us a compelling proposition for
laboratories which we need to exploit during FY19.
Within our Manual business, we are pleased to see the new
commercial team generating a pipeline of revenue opportunities. We
now have to convert these to firm orders, and target an improvement
in the revenue trend of this business during H2 FY19.
Preliminary results for the year ended 31 March 2018 will be
announced on 20 June 2018.
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)207 418 900
James Steel
Oliver Jackson
This information is provided by RNS
The company news service from the London Stock Exchange
END
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