18 Mar 2020 07:00
18 March 2020
Collagen Solutions Plc
(the "Company" or the "Group")
Trading Update
Collagen Solutions Plc (AIM: COS), the developer and manufacturer of biomaterials for the enhancement and extension of human life, announces a trading update for the year ended 31 March 2020 and a statement regarding the COVID-19 outbreak.
The Company expects the loss for the year will be materially greater than anticipated due to increased costs from a development and manufacturing contract which has taken longer than originally anticipated. The related accounting treatment requires a one-time write-down of c.£900k recognising the full loss over the life of the development portion of the contract only. The accounting treatment does not reflect a change in the Company's commercial view of the full value of this contract inclusive of the contract manufacturing portion.
The Company is facing multiple uncertainties that may also impact year-end revenue, pushing some sales into the next financial year. These include:
· closing certain contracts in late-stage discussions, and
· delivery of collagen and tissue products for which the Company has already received orders.
The contract closure referred to above is uncertain because some customers have recently communicated that they are delaying their investment decisions because of economic and business uncertainty due to the COVID-19 outbreak. The delivery of collagen and tissue products is at risk due to evolving government travel and transport restrictions and potential reduced capacity of import and export offices, testing services, and other aspects of the supply chain.
The Company has put in place health and safety measures aligned with the latest government and industry recommendations and policies related to the COVID-19 outbreak. This includes a suspension of all non-essential travel, flexibility for employees faced with indirect effects of these measures, and of course a requirement to remain at home for any sick employees.
The Company is expected to provide a trading update with preliminary year-end revenue and cash balances by mid-April.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Collagen Solutions Plc | |||
Chris Brinsmead, Chairman | |||
Jamal Rushdy, CEO / Hilary Spence, CFO | Via Walbrook | ||
Cenkos Securities Plc (Nominated Adviser and Broker) | |||
Giles Balleny (Corporate Finance) | Tel: 0207 397 8900 | ||
Stephen Keys | |||
Walbrook PR Ltd | Tel: 020 7933 8780 or collagen@walbrookpr.com | ||
Anna Dunphy | Mob: 07876 741 001 | ||