TIDMIDH
RNS Number : 6903W
Immunodiagnostic Systems Hldgs PLC
18 April 2019
FY2019 Trading Update
Immunodiagnostic Systems Holdings PLC
18 April 2019
Immunodiagnostic Systems Holdings PLC
FY2019 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 an unaudited trading update for the Financial Year ended
31 March 2019 ("FY2019").
We are pleased to report that unaudited Group revenues for
FY2019 are expected to be GBP38.5m, which represents a 1% growth
over the previous year. On a like for like basis ("LFL"), that is
at constant exchange rate and scope, Group revenue also increased
1% versus prior year. Thus the Group met its stated target of
returning to LFL revenue growth for the first time since
FY2014.
Revenue Performance in FY2019
The table below summarises the unaudited revenue performance of
the core segments of the Group, and their evolution since
FY2017.
Revenue LFL Change
FY2019 FY2019 v FY2018 FY2018 v
FY2017
----------------------- ----------------------------- ----------------------
Group GBP38.5m 1% -8%
----------------------- ----------------------------- ----------------------
Automated Business GBP22.6m -1% 4%
----------------------- ----------------------------- ----------------------
Automated 25-OH
Vitamin
D GBP5.5m -13% -8%
----------------------- ----------------------------- ----------------------
Speciality - IDS GBP13.7m 1% 5%
----------------------- ----------------------------- ----------------------
Speciality -
Partners GBP1.3m 31% 24%
----------------------- ----------------------------- ----------------------
Instrument Sales and
Service GBP2.0m 2% 43%
----------------------- ----------------------------- ----------------------
Manual Business GBP12.3m -1% -6%
----------------------- ----------------------------- ----------------------
Technology Business GBP3.6m 32% -55%
----------------------- ----------------------------- ----------------------
Automated business
Total Automated revenue declined by 1% on a LFL basis. This is
due to a reduction in 25-OH Vitamin D assay volumes, predominantly
from single assay analyser returns in the US.
Our Speciality business - IDS performance improved in the second
half of the year delivering 1% LFL growth, after a relatively weak
first half where we saw a 2% LFL decline versus the comparable
period in FY2018.
Speciality - Partners revenue encompasses the sales of IDS
branded assays developed and manufactured by IDS's partners.
Revenue in this segment grew by 31% on a LFL basis. H2 FY2019
generated growth of 43% versus H2 FY2018, an acceleration of growth
from the 17% generated in H1 FY2019 versus H1 FY2018. This is
mainly driven by increased sales of Autoimmunity products, which
were CE marked under the IDS brand during the first half of the
year. We undertook the market launch of our range of IDS branded
Allergy assays in March 2019 and expect to see the first sales from
this product range during FY2020.
The other KPIs in this business unit developed as follows:
a) Disappointingly we did not release any new endocrinology
assays in the year due to the development process taking longer
than anticipated. The assays which were targeted for release in the
second half of the year are now expected to be released in FY2020.
At the end of FY2019 IDS offered 135 IDS branded assays with a CE
mark, 22 of which are in-house developments. In the US the number
of assays offered remains unchanged at 10. We expect the next
launches of FDA-approved assays during 2020.
b) Due to a strong performance during Q4, we increased the
number of machines placed or sold during FY2019 to 84 machines
globally (FY2018: 70). This number excludes machine sales to our
OEM partners, which are recorded within our Technology
business.
In our direct sales territories, total placements were 37
(FY2018: 34) with instrument returns of 24 (FY2018: 25). Thus in
our direct sales territories, net placements were 13 (FY2018: 9).
We believe the number of returns is still too high and we are
working on increasing the value of an instrument to the customer,
mostly by upselling more assays from our portfolio.
In terms of gross and net new placements, our European business
performed well. We completed the rebuilding of our sales team in
Europe in the first half of the year. This helped generate strong
momentum in H2.
As noted previously, 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 a new instrument. The
majority of instrument returns during the year occurred in the US.
This situation will continue until we resume launching additional
assays to make our offering more attractive.
Within our distribution markets we sold 47 (FY2018: 36)
instruments. There are no returns in this channel.
c) The average number of assays run per instrument continued to
grow to 5.1 (FY2018: 4.7), reflecting successful cross-selling.
Manual business
During FY2019 we successfully stabilised the Manual business.
Sales were flat on a reported basis, and declined 1% on a LFL
basis. During the year we successfully reinvigorated and expanded
our distribution base and were successful in winning new business
in our direct markets - particularly the US. The underlying
business is well placed to return to a moderate level of LFL growth
in the future, however will be impacted adversely by the loss of
distribution rights related to certain third-party products in the
short term.
Technology business
LFL growth in the Technology business was 32%, and continues to
be driven by large volume orders for analysers by one OEM partner,
as they prepare for the commercial launch of their automated
solution which is based on a white-label i10 instrument. Short-term
revenues in this business unit will be dependent on the success of
this OEM partner's product launch.
We are also pleased to announce the signature of a new OEM
partnership deal with Theradiag, a leading provider of biotherapy
monitoring products. Under this deal IDS will sell analysers and
consumables to Theradiag, who will commence a project to automate
their assays on the IDS analyser. Additionally, IDS have secured
distribution rights to Theradiag's existing range of ELISA based
biotherapy monitoring products, along with the upcoming automated
products, in a selected number of territories including Germany,
the Nordics and Latin America.
Cashflow
Closing cash and cash equivalents were GBP27.7m at 31 March 2019
(31 March 2018: GBP28.5m). Free cash flow, being cash flow before
returns to shareholders, was an inflow of GBP1.3m (FY2018: outflow
of GBP1.4m).
HR
At 31 March 2019 the Group employed 283 people on a full-time
equivalent basis (31 March 2018: 281 persons).
We have continued our focus on improving the results delivered
by our team. At the management level we continued to organise
several workshops on leadership and corporate values throughout the
Group. We will be performing a further engagement survey in April
2019 - the results of which will be summarised in our Annual Report
and Accounts.
All employees in IDS have been driving extremely hard,
particularly during Q4, working together with the goal of ensuring
we returned the Group to revenue growth. We would like to thank all
our teams for their efforts in FY2019 and look forward to continued
success in FY2020.
Outlook
During FY2019 we achieved our short-term target of returning the
business to positive revenue growth on a LFL basis. This was
underpinned by a strong Q4 performance - in both sales and
placements.
Our strategy moving into FY2020 remains unchanged. We will look
to grow the Automated business through additional sales via
distributors, coupled with accelerated growth of our partner
disease panels - in particular autoimmunity. Unfortunately, we
anticipate this expected growth will be partially offset by further
declines in our US business. As set out above this situation will
only improve with the launch of additional FDA-approved assays.
Having successfully stabilised our Manual business, we target
returning this to growth during FY2020.
We look forward to building on this success and momentum moving
into FY2020, where we will target an accelerated rate of sales
growth at a Group level.
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
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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