(Alliance News) - Yourgene Health PLC on Wednesday posted a swing to profit for its recent financial year due to improved trading and substantial gains on debt restructuring.
Shares in Yourgene were down 4.4% at 12.55 pence in morning trade in London.
The diagnostics company swung to a GBP3.4 million pretax profit for its year that ended March 31 from a GBP9.5 million loss the year before. This was the molecular diagnostics company's first annual profit since its 2014 initial public offering.
Yourgene said the swing was "due substantially to benefits of debt restructuring gains but also to improved trading".
This followed a "significant debt write-off" on the restructuring of Yourgene's relationship with Life Technologies. Life Technologies is a division of Thermo Fisher and, in February 2019, Thermo Fisher exercised its warrants for Yourgene shares and cancelled GBP9.4 million of debt, which consisted of all remaining borrowings owed to Thermo Fisher plus interest.
Including GBP1.2 million of financing expense in its financial 2019 year - up from GBP981,979 the year prior - this resulted in a net finance income of GBP8.2 million, compared to a GBP936,715 net finance expense the year before.
Revenue totalled GBP8.9 million, a 46% rise from GBP6.1 million the year before, the majority of which was from outside the UK and Europe. Rest of the World revenue increased 51% to GBP5.9 million from GBP3.9 million.
General administrative expenses held steady at GBP9.0 million but total administrative expenses shrank to GBP9.4 million from GBP11.9 million as the company posted a GBP37,864 release of a provision versus GBP2.7 million of litigation expenses the year before.
The company's operating loss shrank to GBP4.9 million from an GBP8.6 million operating loss the year before.
During the year, Yourgene successfully settled its patent litigation issues with Illumina and agreed a licence and supply partnership under which Yourgene will pay royalties from its IONA test, which is based on Illumina's sequencing technology.
Yourgene Chief Executive Lyn Rees said: "These results demonstrate the strong underlying growth of the business after the transformative realignment of our partnership with Thermo Fisher and formation of a new one with Illumina. We now have a strong balance sheet following the equity fundraise and Elucigene acquisition, the integration of which is progressing ahead of my expectations. We are now well positioned and very much focused on growth. I look forward to launching a new version of the IONA test, our first oncology product and converting our exciting pipeline of new business opportunities into profitable growth."
The company also announced that Keng Hsu, who heads Business Development at Yourgene, is leaving the board with immediate effect "to improve the balance of non-executive and executive directors, and to allow greater focus on his business development work in Asia".