(Allaince News) - Circassia Group PLC on Thursday said that its expects to outperform full-year guidance, amid "strong" revenue growth and cost cutting measures.
Shares in the Oxford-based developer of medical devices for asthma diagnosis and management for were up 7.0% to 34.23 pence each in London on Thursday morning.
Revenue for the first six months of 2022 was up 6% to GBP15.5 million from GBP14.6 million the year prior, despite Covid-19 lockdowns in China. Notably, underlying clinical revenue rose 12% to around GBP13.0 million from GBP11.6 million, excluding a one-off revenue item of GBP600,000, year-on year. Research revenue also increased by 4% to GBP2.5 million from GBP2.4 million.
Circassia said that management has continued to implement a distributor-led sales strategy, with the aim of improving the awareness of FeNO testing and the availability of NIOX worldwide. The company added that the change in business model has led to a reduction in overhead costs to GBP7.8 million from GBP10.0 million.
Pairing together revenue growth and the reduction of overhead costs, the company said that adjusted earnings before income, tax, depreciation and amortisation was GBP3.2 million in the six months to June 30, compared to a loss of GBP300,000 the year before.
Executive Chair Ian Johnson said: "With revenues continuing to grow, margins remaining strong and costs now at a much reduced level, the board believes that Ebitda for 2022 will, in the absence of any fresh lockdown restrictions in major markets, be significantly ahead of our May expectations."
The company added that net cash at June 30 was GBP13.8 million compared to GBP12.6 million at the end of December.
Further, back in June, Circassia said that it had won approval from the US Food & Drug Administration for its LungFit PH device, which is used for the treatment of hypoxic respiratory failure in neonates using nitric oxide generated from ambient air. As a result, the company is entitled to receive payments of USD10.5 million over the next three years plus up to a further USD6 million royalty payments, "providing further cash resources for the group".
Johnson said: "Future revenue growth is likely to be driven by success in raising the awareness of the benefits of FeNO testing and continued expansion of our worldwide network of distributors. The company is now in a strong financial position to continue to invest in these areas and is making good progress."
By Sophie Rose; sophierose@alliancenews.com
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