EKF confident even as Covid-related revenues wind down

29th Mar 2022 12:53

(Sharecast News) - EKF Diagnostics reported a 25% improvement in revenue in its final results on Tuesday, to £81.8m.

The AIM-traded firm said core business revenues rose 14% in the 12 months ended 31 December, to £42.1m.

Gross profit was ahead 5% year-on-year at £39.4m, while adjusted EBITDA grew 4% to £26.5m, which the board said reflected changes in the mix of contract manufacturing-related products, as well as increased costs in the supply chain.

EKF's profit before tax totalled £21.4m including effect of share-based payments, up from £15.4m in 2020, while basic earnings per share rose to 3.47p from 2.45p.

Cash generated from operating activities fell to £10.2m from £13.8m, and cash at year-end on 31 December totalled £20.3m, down from £21.9m, with net cash after borrowings coming in at £19.6m, compared to £21.4m a year earlier.

The company said the value of its investments in marketable securities at year-end totalled £7.6m, up from £6.5m.

EKF said the cash dividend paid to shareholders was totalling £5.1m for the year, equivalent to 1.1p per share - up from 1p in 2020.

"2021 was a year that delivered record revenue and adjusted EBITDA performance," said non-executive chairman Christopher Mills.

"Our key focus remains on implementing our strategy to position our core business for sustainable future growth, utilising cash generated from short-term contract manufacturing activities.

"At the end of 2019, and pre-pandemic, we had a core business that generated revenues of £43.3m and an adjusted EBITDA of £12m."

Mills said the results showed that in 2021, the firm's core business revenues were broadly in line with those pre-pandemic levels, as it implemented its investment plans to support growth in the core business in 2022.

"Current trading is strong and we expect to deliver a solid first quarter performance in line with that of 2021.

"However, we are adopting a pragmatic view that we expect there will be a significant reduction in pandemic-related contract manufacturing activity for the remainder of the year and guiding analysts accordingly.

"The new management team is keenly focused on delivering the growth plan through to 2024 which assumes no benefit from further Covid-related manufacturing, but instead is targeting sustainable revenue growth in our expanded core operations."

At 1223 BST, shares in EKF Diagnostics Holdings were down 14.33% at 43.69p.