TIDMIDH
RNS Number : 0947K
Immunodiagnostic Systems Hldgs PLC
17 April 2020
FY2020 Trading Update
Immunodiagnosti c Systems Holdings PLC
17 April 2020
Immunodiagnosti c Systems Holdings PLC
FY20 Trading Update - Continued Growth in Revenue and Installed
Analyser Base
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 2020 ("FY20") as well as an update on the impact of
COVID-19.
We are pleased to report that unaudited Group revenues for FY20
are expected to be GBP39.3m, which represents a 2% growth over the
previous year. On a like for like ("LFL") basis (i.e. on the basis
of constant exchange rates and scope) growth was also 2%.
Revenue performance in FY20
The table below summarises the unaudited revenue performance of
the core segments of the Group, and their evolution over the last
three years.
Revenue LFL Change
FY20 FY20 v FY19 v FY18
FY19
----------------------- -------------------- -------------------------
Group GBP39.3m 2% 1%
----------------------- -------------------- -------------------------
Automated Business GBP23.4m 4% -1%
----------------------- -------------------- -------------------------
Automated 25-OH
Vitamin D GBP4.8m -14% -13%
----------------------- -------------------- -------------------------
Speciality - IDS GBP14.1m 3% 1%
----------------------- -------------------- -------------------------
Speciality - Partners GBP2.3m 74% 31%
----------------------- -------------------- -------------------------
Instrument Sales
and Service GBP2.2m 9% 2%
----------------------- -------------------- -------------------------
Manual Business GBP11.4m -8% -1%
----------------------- -------------------- -------------------------
Technology Business GBP4.6m 30% 32%
----------------------- -------------------- -------------------------
Automated business
The Automated business performed very strongly during the second
half of the year, and as a result generated LFL growth of 4% to
revenue of GBP23.4m for the full year, the highest ever in our
Automated business. A review of this business by key product
segment is set out below:
25-OH Vitamin D assay revenues continue to decline driven by the
general reduction in demand and lower reimbursement levels for
25-OH Vitamin D assays, along with the consolidation of this test
onto workhorse analysers. Both trends have impacted this business
segment for several years. Revenue reduced by 14% versus the prior
year on a LFL basis, mainly driven by a decline in the US, which we
expect to continue.
Speciality - IDS revenues (i.e. from assays developed by IDS)
increased by 3%. Strong growth in our distribution channels,
coupled with modest growth in our main European direct sales
markets, was offset by revenue declines in the US and Brazil.
Speciality - Partners revenue encompasses the sales of IDS
branded assays developed and manufactured by IDS's partners, and
mainly comprises revenue from our Autoimmune product portfolio. Our
combined Endocrinology/Autoimmune panel continues to be well
received in the market, generating LFL growth of 74% in this
segment.
The other KPIs in the Automated business unit developed as
follows:
a) During the year we obtained FDA approval for an additional
assay, bringing the total number of assays available for sale in
the US to 11. We experienced further delays in our in-house
development process, with the assays scheduled for release in the
second half of FY20 being delayed until FY21. As at the end of
FY20, we have a total of 141 CE-marked assays available for sale on
IDS analysers, comprising:
March 2020
Endocrinology 22
-----------------
Autoimmune 29
-----------------
Infectious Disease 23
-----------------
Allergy 67
-----------------
Total 141
-----------------
b) We achieved sales or placements of 93 (FY19: 84) analysers in
our direct and distribution businesses, our strongest performance
since 2012.
In our direct sales territories, total placements were 43 (FY19:
37) with instrument returns of 25 (FY19: 24). Thus in our direct
sales territories, net placements were 18 (FY19: 13), the highest
level since 2014. Instrument returns in the year were adversely
impacted by the loss during H1 of one major customer who ran a
single assay across multiple machines.
Within our distribution markets we sold 50 (FY19: 47)
instruments, the highest number of sales ever in this channel.
There were no returns in this channel.
c) The average number of assays run per instrument continues to
grow to 5.9 (FY19: 5.1), reflecting successful cross-selling
coupled with IDS's repositioning from an "Endocrinology only"
supplier, to a supplier of assays across the fields of
Endocrinology, Autoimmune and Infectious Disease.
Manual business
During FY20 our Manual business declined 8% on a LFL basis,
which was below our expectations. The decline was mainly due to a
reduction in business in our direct sales markets in Europe. We aim
to redeploy resources to enable a greater sales focus on our Manual
product portfolio in these markets. Our approach will focus on
specific accounts, where with better lead qualification, we are
confident there is still demand for our product portfolio.
Technology business
LFL growth in the Technology business was 30%. During the year
we successfully diversified this business, and now generate
significant revenues from three different partners who purchase our
analysers and related ancillary products. We aim to expand the
number of partners who utilise our technology, to enable continued
revenue growth and reduce our reliance on a handful of partners.
The long-term future of this business is dependent on the
development by our partners of their respective assay panels for
the IDS analysers, and the success of these new panels in the
market.
Cash position
Closing cash and cash equivalents were GBP27.6m at 31 March 2020
(31 March 2019: GBP27.7m).
COVID-19 update
Actions taken
We are pleased to say all our manufacturing locations have
remained operational due to the dedication of the IDS team. The
safety of our people is the top priority thus we are following all
relevant government regulations, including those related to social
distancing and good hygiene practices. Employees not directly
involved in the manufacture of our products are working remotely.
IDS management, and our internal COVID-19 task force, are closely
following all COVID-19 updates provided by governments in the
jurisdictions in which we operate, and will ensure we continue to
comply with all relevant regulations as and when they are
released.
Our procurement team is working closely with our supply chain to
ensure continuity of supply, and to date we have not had
significant issues which impact our operational capabilities. We
are hopeful the measures we have taken will enable us to maintain
the operational status of our manufacturing facilities.
We are in constant contact with our Italian partner responsible
for manufacturing our range of Autoimmune and Infectious Disease
products. To date they have also maintained their operational
capabilities.
We were able to overcome any disruption in the final quarter of
FY20 due to the COVID-19 outbreak. One exception was that we were
required to delay the planned sale of a significant number of
analysers to our Chinese distributor into FY21.
Looking forward
So far in April 2020 we have seen a reduction in revenue versus
the same period last year, caused by a reduction in routine medical
testing in hospitals and laboratories as their focus has been on
COVID-19 treatment and testing. IDS intend to take appropriate
action, including utilising the various schemes available from
governments to provide business support, to minimise our costs
during this period of uncertainty. From a liquidity perspective,
IDS is in a very strong position with cash holdings of almost
GBP28m.
We are offering our production facilities, and sales network, to
several new and existing partners who are in the process of
developing COVID-19 test kits.
IDS team
At 31 March 2020 the Group employed 295 people on a full-time
equivalent basis (31 March 2019: 283 persons). The increase is
mainly due to IDS creating a team tasked with ensuring that our
assays will comply with the future IVDR regulations, which will
come into effect in May 2022.
We would like to thank each and every employee of IDS who worked
tirelessly despite the difficult circumstances arising from the
COVID-19 virus at the end of the year, to ensure that IDS has now
posted two consecutive years of revenue growth.
The continued improvement in overall business performance is
mirrored by a substantially improved level of employee engagement,
as measured by our annual engagement survey. More details will be
provided in our Annual Report and Accounts 2020.
Outlook
During FY20 we achieved our goal of delivering a second year of
LFL revenue growth. The return to growth of our Automated business,
coupled with increasing numbers of instrument placements is very
encouraging, as is the continued strong growth of our Technology
business. While the results of our manual business were below
expectations, we have identified the causes and defined a course of
action to improve the performance of this business.
Looking forward, as mentioned earlier, the COVID-19 situation
means there is some uncertainty surrounding the expected revenue
performance in H1 of FY21 and we are therefore unable to provide
guidance at this time. However, we are confident once the global
situation improves, we are well positioned to continue a path of
revenue growth, leveraging our increasing installed instrument base
and assay menu.
Preliminary results
We expect to announce preliminar y results for the year ended 31
March 2020 on 17 June 2020. However, as explained in the AIM notice
of 26(th) March 2020, there are many logistical challenges arising
due to the COVID-19 situation regarding the completion and audit of
annual reports. We will provide a further update if any of these
will impact the announcement date.
For further information:
Immunodiagnosti c Systems Holdings PLC Tel : +44 (0)191 519 0660
Jaap Stuut, Chief Executive Officer
Paul Martin, Group Finance Director
Pee l Hunt LLP Tel : +44 (0)207 418 8900
James Steel
Oliver Jackson
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END
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