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EKF Diagnostics trading well as it starts looking beyond pandemic
19th May 2021 10:12
(Sharecast News) - Point-of-care company EKF Diagnostics updated the market on its trading on Wednesday, following its most successful year to date in 2020, with record turnover and profits.
The AIM-traded firm, which was holding its annual general meeting, said that strong performance had continued into the new financial year, driven by a "very meaningful recovery" in trading from its core business which, despite the ongoing effects of the Covid-19 pandemic, had performed more strongly than expected with growth in the first quarter.
It also reported strong demand for its contract manufacturing services for Covid-19 sample collection devices and associated kits.
Non-executive chairman Christopher Mills said that after multiple upgrades last year, and a "step change" in year-on-year performance, the announcement in March of a multi-million dollar contract expansion for the supply of sample collection devices to a large multinational customer had driven a further material upgrade to revenue expectations, and a significant one for profit for 2021.
"The March upgrades were based just on visible orders under the supply agreement and a continuing conservative approach to forecasting on the core business," Mills said.
"Strong trading continues into the second quarter 2021, and the board is now confident that trading for the full year will be comfortably ahead of already upgraded management expectations."
The chairman said there was "clear scope" for the company to evolve its contract manufacturing activities beyond the current pandemic catalyst, and to capture the "significant additional potential" for the core business.
Recognising that, he said the board had been evaluating EKF's growth strategy, with a view to ensuring and driving sustainable growth into the future.
"While our approach to forecasting and guidance to analysts may be conservative, our aspirations are ambitious.
"Your board is very clear that there are excellent opportunities to support accelerated growth within our core business, and to utilise our strong cash generation effectively to generate further considerable value for shareholders."
That did not imply that the firm's Covid-19 business would not continue for a number of years to come, Christopher Mills cautioned, noting that its largest contract was for a minimum of two years, as it also continued to win new clients which could add to current production.
"In fact, we are investing in our Covid-19-related activities as we strive to increase capacity in our manufacturing facilities to meet the increasing demands of our clients.
"Our manufacturing capabilities are applicable to other forms of diagnostic tests and we are already making third party products for other healthcare applications."
At 0955 BST, shares in EKF Diagnostics Holdings were up 8.36% at 73.9p.
The AIM-traded firm, which was holding its annual general meeting, said that strong performance had continued into the new financial year, driven by a "very meaningful recovery" in trading from its core business which, despite the ongoing effects of the Covid-19 pandemic, had performed more strongly than expected with growth in the first quarter.
It also reported strong demand for its contract manufacturing services for Covid-19 sample collection devices and associated kits.
Non-executive chairman Christopher Mills said that after multiple upgrades last year, and a "step change" in year-on-year performance, the announcement in March of a multi-million dollar contract expansion for the supply of sample collection devices to a large multinational customer had driven a further material upgrade to revenue expectations, and a significant one for profit for 2021.
"The March upgrades were based just on visible orders under the supply agreement and a continuing conservative approach to forecasting on the core business," Mills said.
"Strong trading continues into the second quarter 2021, and the board is now confident that trading for the full year will be comfortably ahead of already upgraded management expectations."
The chairman said there was "clear scope" for the company to evolve its contract manufacturing activities beyond the current pandemic catalyst, and to capture the "significant additional potential" for the core business.
Recognising that, he said the board had been evaluating EKF's growth strategy, with a view to ensuring and driving sustainable growth into the future.
"While our approach to forecasting and guidance to analysts may be conservative, our aspirations are ambitious.
"Your board is very clear that there are excellent opportunities to support accelerated growth within our core business, and to utilise our strong cash generation effectively to generate further considerable value for shareholders."
That did not imply that the firm's Covid-19 business would not continue for a number of years to come, Christopher Mills cautioned, noting that its largest contract was for a minimum of two years, as it also continued to win new clients which could add to current production.
"In fact, we are investing in our Covid-19-related activities as we strive to increase capacity in our manufacturing facilities to meet the increasing demands of our clients.
"Our manufacturing capabilities are applicable to other forms of diagnostic tests and we are already making third party products for other healthcare applications."
At 0955 BST, shares in EKF Diagnostics Holdings were up 8.36% at 73.9p.