IDH.L Regulatory News (IDH)

H1 Trading Update

Immunodiagnostic Systems Holdings PLC 

23 October 2020

Immunodiagnostic Systems Holdings plcH1 Trading Update

Immunodiagnostic Systems Holdings PLC ("IDS" or "the Group"), a specialist producer of manual and automated diagnostic testing kits and instruments for the clinical and research markets, today provides a trading update for the six months ended 30 September 2020 ("H1 FY21").

Revenue Update

The COVID-19 pandemic has had an extraordinary impact on global economic performance, and to healthcare systems around the world. Levels of routine diagnostic testing dropped significantly to around 50% of normal levels in April. Since then they have been on a recovery path to normalized levels, reaching an estimated 85% in September. This resulted in a material impact on IDS revenues in H1 FY21.

Unaudited Group revenues for H1 FY21 are £13.7m, 27% lower than the same period last year on both a LFL (i.e. at constant FX rates) and reported basis. This revenue performance was characterized by a low Q1, the maximum revenue contraction being in April where revenues were only at 53% of previous year levels. However there has been a significant revenue recovery during Q2, as set out below:

The following table summarizes the unaudited revenue performance of the three business units within IDS:

Our speciality endocrinology business declined, however it proved more resilient to the effects of the pandemic than our Vitamin D business. It was pleasing to see continued growth in our Autoimmune business versus the same period last year.

Business performance was very dependent on geography. During Q2 FY21 sales in our direct European territories had recovered and were slightly ahead of the same period in the previous year. Conversely, sales in the USA and some of our distribution territories were significantly lower due to these countries taking longer to emerge from the first stage of the COVID-19 crisis.

Automated KPIs

During H1 FY21, we placed or sold 9 machines (H1 FY20:18) in our direct markets, and 12 (H1 FY20: 14) via our distributors, bringing the total to 21 (H1 FY20: 32). Returns in the quarter in our direct sales territories were 10 (H1 FY20: 14). The average number of assays run on an analyser increased to 6.1 (September 2019: 5.4) demonstrating that we continue to be successful in upselling new assays onto existing placements.

COVID-19 Products

During H1 FY21 we launched automated immunoassays for the detection of SARS-CoV2 IgG and IgM antibodies, which can detect past infections and also provide critical public health information. We also provided outsourced manufacturing services to The Binding Site (UK) for their ELISA-based SARS-CoV-2 antibody test. Revenue from COVID-19 products amounted to £0.4m during Q2 FY21. In conjunction with one of our partners we are working on the development of a saliva-based rapid test for SARS-CoV-2 antigens. This test would allow for immediate identification of individuals with an elevated amount of SARS-CoV-2 and be extremely helpful for curtailing the spread of the virus.

Automated Assay Launches

Our R&D efforts delivered a new automated Cortisol assay, which has successfully rounded out our automated hypertension panel. Additionally, we achieved 510k approval for our BAP assay in the USA and expect to make the first sales of this key assay in H2 FY21. We also launched a panel of four therapeutic drug monitoring tests used to monitor the efficacy of Infliximab and Adalimumab drugs used in the management of chronic inflammatory diseases. These are the first such automated tests available in the market.

The assays available for sale on the IDS automated instruments now comprise:

At the end of H1 FY21, 12 of the speciality endocrinology assays are available for sale in the USA (H1 FY20: 11)

Operations

IDS had faced unprecedented challenges and restrictions arising from the COVID-19 crisis - these have varied in each of our operational locations, and across the territories where our customers and suppliers are based. It is a credit to our entire team that we were able to maintain full operational capabilities across the business, thus ensuring continuity of supply to all our customers, while adhering to all regulations recommended to ensure the safety of our employees. We have carefully managed costs during the period, using various reduced hours working schemes where appropriate. As result we have been able to reduce fixed costs by over £2m in H1 FY21 compared to our plan.

Other KPIs

Closing cash and cash equivalents were £24.2m at 30 September 2020 (31 March 2020: £27.6m). During H1 FY21 a dividend of £0.5m was paid related to the previous year, and there were no share buybacks.

At 30 September 2020 the Group employed 286 people on a full-time employment basis (31 March 2020: 295 persons).

Outlook

Throughout H1 we have seen a continued improvement in the revenue trajectory of the business as it recovered from the impact of the COVID-19 pandemic. However there remains uncertainty as to how this recovery might evolve, as it is highly contingent on the future development of the pandemic.

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, which now includes a comprehensive SARS-CoV-2 offering, as well as our strong balance sheet position. Furthermore, our shrinking Vitamin D business has lost significant weight in our revenue mix, thus the structural growth of our non-vitamin-D business should show through once we have returned to normal.

Interim Report

The interim results for the six months ended 30 September 2020 are expected to be announced on 20 November 2020.

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