23 Jul 2020 07:00
AGM Statement
Immunodiagnostic Systems Holdings PLC
23 July 2020
Immunodiagnostic Systems Holdings plcAGM Statement
Immunodiagnostic Systems Holdings PLC ("IDS"), a specialist producer of manual and automated diagnostic testing kits and instruments for the clinical and research markets, will today hold its Annual General Meeting at 2pm at its registered office at 10 Didcot Way, Boldon Business Park, Boldon, Tyne & Wear, NE35 9PD. The Chairman of the meeting will make the following statement to shareholders:
Revenue Update
As set out in our Annual Report & Accounts 2020, revenue was expected to decrease in Q1 FY21 due to the impact of the COVID-19 pandemic. Testing in our core endocrinology franchise is not acute in nature, thus there is the possibility to postpone diagnostic testing. As a result, routine testing was significantly reduced in most laboratories and hospitals due to the pandemic. This situation led to a decrease in demand for IDS testing kits, impacting all our business units.
Overall, revenues in the month of April suffered the most significant impact, but then improved as we moved through the quarter to June. Our European direct markets are leading the recovery, with revenues in June 2020 being similar to June 2019. Revenue recovery in the US direct market and many of our distribution markets has been slower, as these markets are relatively more strongly affected by the COVID-19 pandemic. We expect revenues in these markets to swiftly return to normal once routine hospital testing recovers, as we have already seen in Europe. During the first two weeks trading in July, group revenues were at over 80% of the levels seen in the same period in the prior year.
Unaudited group revenues for the 3 months to 30 June 2020 ("Q1 FY21") are £5.7m (Q1 FY20: £9.1m). On a LFL basis (i.e. at constant exchange rates) revenues decreased by 39%.
Revenue | LFL Change | ||
Q1 FY21 | Q1 FY21 v Q1 FY20 | FY20 v FY19 | |
Group | £5.7m | (39%) | 2% |
Automated business | £3.3m | (36%) | 4% |
Manual business | £1.6m | (47%) | (8%) |
Technology business | £0.8m | (32%) | 30% |
Other Automated KPIs
During the quarter we placed or sold 6 machines (Q1 FY20: 9) in our direct markets, and 12 (Q1 FY20: 10) via our distributors, bringing the total to 18 (Q1 FY20: 19). Returns in the quarter in our direct sales territories were 2 (Q1 FY20: 9) meaning that in our direct sales markets net placements were 4 (Q1 FY20: nil). We consider this a satisfactory outcome when taking into account the restrictions the pandemic imposed on sales activities.
COVID-19 Testing Range
As announced on 30 June, we released our automated SARS-Cov2-IgG test in countries that accept the CE mark. Interest from our direct and distribution customers has been strong and initial feedback from their validation processes positive. The first sales of this test were made during July. We are hoping to launch a complimentary SARS-Cov2-IgM automated test in the coming months. Furthermore, we are also providing contract manufacturing services to a developer of an ELISA based test, and produced the first prototype batches in June and July.
These products have great potential, though it is too early to estimate the revenue levels which they will generate. We are confident IDS have enough capacity for analyser instruments and assay manufacturing to meet likely demand.
Impact of COVID-19 on Operations
As noted in our Annual Report & Accounts 2020, we have been able to maintain manufacturing operations throughout the pandemic. We have not suffered any significant stock outages during the pandemic, and shipping activities are back to normal.
Other KPIs
Unaudited closing cash and cash equivalents were £26.8m as at 30 June 2020 (31 March 2020: £27.6m). In the period there were no dividends paid or share buybacks.
At 30 June 2020 the Group employed 297 people on a full-time employment basis (31 March 2020: 295 people).
Outlook
While the outlook for IDS will very much depend upon the progress the world makes in supressing the COVID-19 virus, we expect to see continued improvement in the revenue trajectory of the business during FY21 Q2. We remain confident, that once the global situation improves, IDS is well positioned to return to growth, leveraging our increasing installed base and assay menu as well as our strong balance sheet position.
For further information:
Immunodiagnostic Systems Holdings plc Tel : +44 (0)191 5190660
Jaap Stuut, Chief Executive Officer
Paul Martin, Group Finance Director
Peel Hunt LLP Tel : +44 (0)207 418 8900
James Steel
Oliver Jackson