RE: £8.7m MCAP26 Sep 2024 15:42
In preparing the forecast, the Directors note that it includes estimates of product and contract revenue reflecting significant increases in the number of CiRT and PSE tests to be ordered through the remainder of FY24 and into FY25 compared to the period, and expectations of a number of new contracts with pharma customers. Predicted cash balances in the forecast, whilst positive throughout the period covered, are expected to be reduced to a low level relative to the Group's cost base through much of 2025.
The Directors also draw attention to several significant uncertainties inherent in the preparation of the forecast, primarily relating to balances associated with the revenue / income cycle, since most of the Group's costs are reasonably predictable and controllable. These uncertainties include volumes of orders of the Group's two on-market tests; reimbursement rates and timing of the reimbursement cycle (and consequent impact on the Group's working capital); and the number and value of new pharma/biotech agreements.
Cash resources as predicted in the forecast are very sensitive to changes in the assumptions related to these uncertainties: this was noted in an alternative 'low growth scenario' considered by the Directors that reflects reduced test volumes compared to the forecast and assumes no new projects for pharma customers. Without any remedial action to reduce costs or delay expenditure, in this scenario the Group and Company would need to obtain additional funds during the first quarter of 2025 in order to continue as a going concern.
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