14 Jul 2022 07:00
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR. The persons taking responsibility for this announcement are the Company contacts named below.
CIRCASSIA GROUP PLC
("Circassia" or the "Company" and, together with its subsidiaries, the "Group")
Trading Update
Oxford, UK - 14 July 2022: Circassia Group plc (AIM: CIR), a company engaged in the design, development and commercialisation of medical devices for asthma diagnosis and management, today announces a trading update for the six months ended 30 June 2022 ("H1 2022").
Highlights
· Underlying revenue growth of 11% to £15.5m
· Adjusted EBITDA of approximately £3.2m (H1 2021: EBITDA loss of £0.3m)
· Strong balance sheet with cash of £13.8m (31 December 2021: £12.6m)
· FDA approval for Beyond Air's LungFit device, initiating total payments of $10.5m over the next three years, with $2.5m due in H2 2022
Unaudited revenues for the six months ended 30 June 2022 were approximately £15.5m, up 6% on the same period last year (2021: £14.6m), with underlying revenues ahead by 11% (excluding the effect of a one-off revenue item of £0.6m recognised in H1 2021). Underlying clinical revenues grew 12% to approximately £13.0m (H1 2021: £11.6m, excluding the one-off revenue item of £0.6m), despite the effect of Covid lockdowns in China during the first half. Research revenues were ahead by 4% to £2.5m compared with what was a strong H1 in 2021 (£2.4m).
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 change in the business model has led to a reduction in overheads from £10.0m in H1 2021 to approximately £7.8m in H1 2022. This, together with strong gross margins largely driven by revenue mix, has resulted in H1 2022 adjusted EBITDA1 of approximately £3.2m compared with a loss of £0.3m in H1 2021.
Unaudited net cash at 30 June 2022 was £13.8m (31 December 2021: £12.6m) with the Group producing a cash inflow of £1.2m in the period. Net rebate payments for the discontinued COPD business during the first half, were £0.7m. As announced on 29 June 2022, Beyond Air received FDA approval of their LungFit product, as a result of which Circassia is entitled to receive payments of $10.5m over the next three years plus up to a further $6m royalty payments, providing further cash resources for the Group.
Circassia expects to release its Interim Results for the six months ended 30 June 2022 on 14 September 2022.
Ian Johnson, Circassia's Executive Chairman, said: "I am pleased to be able to report continued growth in revenues and profits in the year to date. The Company continues to benefit from a high degree of recurring revenues and is trading very profitably and generating cash. We indicated at the time of our AGM in May that EBITDA would be materially ahead of our initial expectations for 2022. 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.
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.
I look forward to updating shareholders again at the time of the half-year results."
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 Tel: +44 (0) 20 7496 3000
About Circassia
Our ambition is to improve the quality of life of millions of people suffering from asthma. Asthma is one of the biggest healthcare issues globally with 340 million sufferers, many of whom are undiagnosed or misdiagnosed The Company is engaged in the design, development and commercialisation of medical devices for the measurement of FeNO, a biomarker of inflammatory asthma. Our market leading device, NIOX VERO, is increasingly recognised by healthcare professionals as an important tool to improve the diagnosis and management of asthma. NIOX VERO is also the device of choice by leading clinical research organisations for respiratory studies. We passionately believe in empowering everyone to manage their health at home and will look to provide a device designed exclusively for home use.
At present, Circassia provides products and services in around 50 countries. For more information please visit www.circassia.com.