18 Oct 2019 16:35
H1 Trading Update
Immunodiagnostic Systems Holdings PLC
18 October 2019
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 2019 ("H1 FY20").
Unaudited Group revenues for H1 FY20 are expected to be £18.8m, 2% higher than the same period last year. On a like for like basis ("LFL"), that is at constant exchange rate and scope, Group revenues are in line with the same period last year.
Revenue Performance in H1 FY20
The table below summarizes the unaudited revenue performance of the core segments of the Group. The right-hand column shows developments in FY19 vs. FY18 to provide a view of the underlying momentum.
| Revenue | LFL Change | |
| H1 FY20 | H1 FY20 v H1 FY19 | FY19 v FY18 |
Group | £18.8m | 0% | 1% |
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Automated Business | £11.0m | 0% | -1% |
Automated 25-OH Vitamin D | £2.3m | -20% | -13% |
Speciality - IDS | £7.1m | 5% | 1% |
Speciality - Partners | £0.9m | 52% | 31% |
Instrument Sales and Service | £0.7m | 3% | 2% |
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|
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Manual Business | £5.7m | -8% | -1% |
Technology Business | £2.1m | 32% | 32% |
Automated business
Automated revenue remained unchanged LFL versus H1 FY19, with growth in speciality assays offsetting declining 25-OH Vitamin D sales.
25-OH Vitamin D revenue declined 20% LFL due to a reduction in 25-OH Vitamin D assay volumes and the impact of "Vitamin D only" instrument returns in the US during the second half of FY19.
Speciality - IDS revenues grew by 5% LFL versus H1 FY19, with improved performance across most indication areas, particularly our bone and growth panels, aided by instrument placements at the end of FY19 becoming operational. This is an improvement in trajectory versus Q1, where this business stream declined 2% LFL versus the prior year. We believe we can improve the growth trajectory of this segment as we release new endocrinology assays, which is key to our mid and long-term profitability.
Speciality - Partners revenue encompasses the sales of assays developed by IDS's partners and sold under the IDS brand. These consist of 51 assays in the fields of Autoimmunity and Infectious Disease. Revenue in this segment grew by 52% LFL, a further acceleration in the growth rate compared to the previous year. This Autoimmune speciality segment is a key focus area for new placements in FY19 and FY20.
The other KPIs in this business unit developed as follows:
a) We did not release any new assays in H1 FY20. The R&D team delivered a successful performance improvement to a key existing assay. We are targeting the release of two new assays in H2.
b) Instrument placement performance improved as set out in the table below:
| H1 FY20 | H1 FY19 |
Gross placements in Direct Markets [1] | 18 | 15 |
Returns in Direct Markets | (14) | (12) |
Net Placements in Direct Markets | 4 | 3 |
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Sales in Distribution Markets [2] | 14 | 13 |
Total Gross Instrument Sales / Placements [1]+[2] | 32 | 28 |
During H1 FY20 the Group lost a significant customer which ran one assay in high volumes across multiple analysers. This adversely impacted the number of returns in H1. We expect assay returns in H2 to be lower than H1.
c) The average number of assays run per instrument increased to 5.4 (H1 FY19: 4.8), reflecting successful cross-selling, in particular the adoption of Autoimmune and Infectious Disease assays across the IDS installed based.
Manual business
The Manual business saw a decline of 8% LFL versus H1 FY19. The decline is mainly due to a large one-off sale in H1 FY19 which was not repeated and does not suggest systematic deterioration of the underlying business unit performance. Thus, our goal is to improve the revenue trajectory of this business as we move through the second half of the year.
Technology business
Our technology business - comprising the sale of instruments and consumables to OEM partners - continues to grow, with LFL growth of 32% versus H1 FY19, generated mainly from two active OEM partners. We are currently in negotiations with several leads who are interested in using the IDS analyser technology on an OEM basis, and successful conclusion of these deals will allow us to diversify and continue to grow this business.
Other KPIs
Closing cash and cash equivalents were £28.1m at 30 September 2019 (30 September 2018: 27.8m, 31 March 2019: £27.7m). During H1 FY20 a dividend of £0.2m was paid and there were no share buybacks.
At 30 September 2019 the Group employed 273 people on a full-time employment basis (30 September 2018: 286 persons, 31 March 2019: 283 persons).
Outlook
Based on the positive momentum within H1 we maintain our FY20 target of delivering increased full year revenue on a LFL basis versus FY19.
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