13 Jul 2021 07:00
Circassia Group plc
First Half Trading Update
Business strategy drives H1 revenue and profit growth
Oxford, UK - 13 July 2021: Circassia Group plc ("Circassia" or "the Company"; LSE: CIR), a medical device company focused on point of care asthma diagnosis and management, today announces a trading update for the six months ended 30 June 2021 ("H1 2021").
Highlights
· Revenue growth of 27%
· NIOX business EBITDA positive for first time (excluding corporate costs)
· Net cash £11.3m
· Completion of runoff period for Tudorza and Duaklir
· Settlement of Beyond Air dispute, with potential upside to Circassia
Management has continued to implement its business strategy, focussing exclusively on Niox. Unaudited revenues for the Niox business for the six months ended 30 June 2021 were approximately £14.5m, up 27% on the same period last year (H1 2020: £11.4m) and up 16% on H2 2020 (£12.5m).
Clinical revenues were up 16% to approximately £12.1m (H1 2020: £10.5m) and up 10% on H2 2020 (£11.0m), as more patients were able to visit their physician. Whilst Clinical revenues are yet to return fully to pre-COVID levels, sales in the first half of 2021 were approximately 84% of underlying sales in H1 2019. H1 2021 Clinical revenue included a one-off £0.6m benefit arising from the final unwinding of certain historical trading arrangements in China.
The Research business made a strong start to the year as clinical studies run by our customers resumed. Revenues were more than double those of H1 2020 at £2.4m (H1 2020: £0.9m), up 50% on H2 2020 (£1.6m) and up 9% on the first half of 2019 (£2.2m).
The discontinued COPD business traded profitably during the first quarter, with the transfer of these products back to AstraZeneca completed on 31 March 2021.
Management has also changed the sales and marketing strategy to reduce fixed costs by putting greater emphasis on third party distribution. Tight cost control and changing the business model has resulted in a dramatic 34% reduction in overheads, from almost £14.0m in H1 2020 to approximately £9.2m in H1 2021. This, together with the impact of the £0.6m one-off item referred to above, has resulted in a corresponding improvement in H1 2021 EBITDA to approximately £0.5m for the Niox business (before corporate overheads) compared with an EBITDA loss of £4.8m in H1 2020.
Unaudited net cash at 30 June 2021 was £11.3m (31 December 2020: £7.4m) with the Group having a net cash outflow of £1.1m in the period. Additionally, the Company raised £5.0m in equity in March 2021. As previously announced on 26 May and subject to FDA approval of their product, the settlement reached with Beyond Air, Inc. will provide further cash resources of up to $16.5m over time.
Circassia expects to release its interim results for the six months ended 30 June 2021 on 16 September 2021.
Ian Johnson, Circassia's Executive Chairman, said: "We are pleased to report that the Niox business has turned a corner and, with the building blocks now in place, is profitable at the EBITDA level for the first time in the history of the Company. Management continues to implement the new business model to generate top line growth and to drive further benefit from the significantly reduced cost base in the second half.
"Accordingly the Board believes that, notwithstanding revenue visibility continuing to be limited, the Company's full year EBITDA performance is likely to be ahead of current market expectations."
This announcement contains inside information for the purposes of Article 7 of the UK Market Abuse Regulations.The Directors of the Company take responsibility for this announcement.
Contacts
Circassia
Ian Johnson, Executive Chairman Tel: +44 (0) 1865 405 560
Michael Roller, Chief Financial Officer
Singer Capital Markets (Nominated Adviser and Broker)
Aubrey Powell/ Jen Boorer/ Hannah Woodley Tel: +44 (0) 20 7496 3000
About Circassia
Circassia is a medical device company focused on point of care asthma diagnosis and management. Our market-leading NIOX® products are used in clinical settings by physicians around the world to improve asthma diagnosis and management and by leading research organisations conducting clinical studies on behalf of pharmaceutical companies. At present, Circassia provides products and services in around 50 countries. For more information please visit www.circassia.com.
Forward-looking statements
This press release contains certain projections and other forward-looking statements with respect to the financial condition, results of operations, businesses and prospects of Circassia. The use of terms such as "may", "will", "should", "expect", "anticipate", "project", "estimate", "intend", "continue", "target" or "believe" and similar expressions (or the negatives thereof) are generally intended to identify forward-looking statements. These statements are based on current expectations and involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. Any of the assumptions underlying these forward-looking statements could prove inaccurate or incorrect and therefore any results contemplated in the forward-looking statements may not actually be achieved. Nothing contained in this press release should be construed as a profit forecast or profit estimate. Investors or other recipients are cautioned not to place undue reliance on any forward-looking statements contained herein. Circassia undertakes no obligation to update or revise (publicly or otherwise) any forward-looking statement, whether as a result of new information, future events or other circumstances.