20 Oct 2017 16:30
H1 Trading Update
Immunodiagnostic Systems Holdings PLC
20 October 2017
Immunodiagnostic Systems Holdings plcH1 Trading Update
Immunodiagnostic Systems Holdings PLC ("the Group"), a specialist producer of manual and automated diagnostic testing kits and instruments for the clinical market, today provides a trading update for the six months ended 30 September 2017 ("H1 FY18").
Unaudited group revenues for H1 FY18 are £18.7m, 4% lower than the same period last year. On a like for like basis ("LFL"), that is at constant exchange rate and constant scope, Group revenues declined by 11% year on year. Nearly all of this decrease was due to the decrease in antibody license income from a large customer which had been expected. Without this decrease the decline amounted to 1% on a LFL basis.
Revenue Performance in H1 FY18
The table below summarises the unaudited revenue performance of the core segments of the Group:
Revenue | Revenue Growth LFL | ||
H1 FY18 | H1 FY18 v H1 FY17 | H1 FY17 v H1 FY16 | |
Group | £18.7m | -11% | -9% |
Group (excluding antibody license income) | £18.6m | -1% | -5% |
Automated business1 | £11.6m | 8% | -2% |
Automated 25-OH Vitamin D | £3.3m | -3% | -25% |
Speciality automated business | £7.4m | 10% | 16% |
Manual business | £6.0m | -10% | -11% |
Licensing & Technology business | £1.0m | -71% | -23% |
1the balance of the automated business not analysed relates to sales of instruments and support services.
During H1 FY18, we saw an overall progression in some revenue metrics, but also experienced disappointment in others:
· Our Automated business returned to LFL growth, returning 8% growth in the period. The rate of decline in 25-OH Vitamin D slowed significantly, mainly because during the previous year there was a significant reduction in the instruments running only this assay, thus the remaining 25-OH revenue is proving more resilient to the competitive pressures we face. The LFL growth of 10% in our Speciality Automated business was lower than the same period in the prior year as a result of slower sales of our 1,25 Vitamin D assay; this is a disappointing result as we expect future growth to be driven by this set of tests. Management is working with sales and marketing to identify and eliminate the causes for this development. The key focus is on product improvement and improvements in the sales process;
· Our Manual business continued to decline at the rate of 10% year on year. During the period the new position of Manager Manual Business Unit was recruited. The Board expects that with new resources committed to this business unit we should be able to reduce the rate of decline going forwards. Several action items have been already identified;
· The decline in the Licensing & Technology business is accounted for mainly by the loss of antibody royalty income from one major customer. This contributed £2m of revenue in H1 FY17, however negligible revenue was recorded in H1 FY18 as expected. As noted in the AGM statement, with this now accounting for less than 1% of group revenues, this source of drag on Group revenue growth will not continue after the end of this financial year.
Other KPIs
The other KPIs we are using to monitor the automated business are set out below:
· The average number of assays run on our installed base of iSYS analysers: This KPI has remained consistent at 4.3 assays per machine. (H1 FY17: 3.9, FY16/17: 4.3). Again, the review of our sales process is looking to address the causes of this stagnation.
· Gross placements of analysers in markets with direct sales organisation: This KPI stood at 18 (H1 FY17: 15, FY16/17: 40) during the period. Net new placements, after returns, stood at 9 (H1 FY17: 5, FY16/17: 16).
· In H1 FY18 we launched one new test with a CE-mark, the IDS-iSYS Free Testosterone assay in our Fertility panel. We still target four product launches with CE mark in the current financial year.
Closing unaudited cash and cash equivalents were £29.7m as at 30 September 2017 (30 September 2016: £28.7m, 31 March 2017: £31.5m). Of this decrease the payment of dividends accounted for £1.2m.
At 30 September 2017 the Group employed 284 people on a full time equivalent basis (30 September 2016: 294 persons, 31 March 2017: 275 persons).
This time last year we announced the goal of stabilising revenues on a LFL basis. In our core laboratory business we came close to this with a LFL decrease of 1% year on year; overall numbers are dragged down from the loss of our large antibody client. At the operational level we continue to strive to expand and optimise our sales team to align our resources to the market requirements, particularly in Western Europe. We have confidence that the strategy we have adopted will allow us to return to growth in the medium term through continued focus on our Speciality automated business, coupled with a renewed focus on our manual business.
The Group expects to announce its unaudited interim results on 24 November 2017.
For further information:
Immunodiagnostic Systems Holdings plc Tel : +44 (0)191 5190660
Regis Duval, Chief Executive Officer
Paul Martin, Group Finance Director
Peel Hunt LLP Tel : +44 (0)207 418 8900
James Steel
Oliver Jackson