Niox Group describes very strong first-half

18th Jul 2023 09:07

(Sharecast News) - Asthma diagnosis and management device specialist Niox Group described a strong first-half in a trading update on Tuesday, with revenue growing 22% to around £18.8m.

The AIM-traded firm - formerly known as Circassia Group - said core clinical revenue experienced significant growth, reaching about £16.7m - an increase of 29% year-on-year.

However, there was a reduction in research revenues to £2.1m compared to a strong first-half in 2022, which saw £2.5m.

The growth in clinical revenues, along with improved gross margins driven by revenue mix and reduced overheads, contributed to a substantial rise in adjusted EBITDA.

Niox Group said its adjusted EBITDA reached around £6.2m for the six months ended 30 June - an increase from £3.2m in the first half of 2022.

The company maintained a strong balance sheet, evident from its cash position of £23.8m at the end of June, compared to £19.4m at the end of December.

The group's continuing activities generated a cash inflow of £5.5m during the period.

Returns payments for the discontinued COPD business in the first half amounted to £1.1m, while there were no rebate payments or claims.

Niox announced a special dividend of 2.5p per share, equivalent to a return of £10.5m, which would be paid on 15 September.

"I am pleased to report continued growth in revenues and profits in the first half of the current financial year," said executive chairman Ian Johnson.

"It is particularly satisfying to describe the strong growth in our core clinical business, which continues to benefit from a high degree of recurring revenues.

"We indicated at the time of our annual general meeting in May that adjusted EBITDA would be significantly higher than management expectations at the start of the year."

Johnson said that after two further full months of strong trading, particularly in the Asia-Pacific region, management's expectations for the year-end outturn had been subject to further material upgrade.

"The company is now in a strong financial position and with positive momentum in the business.

"I look forward to updating shareholders again at the time of the half-year results."

Niox Group said it would release its interim results for the six months ended 30 June on 26 September.

At 1608 BST, shares in Niox Group were up 9.06% at 69.8p.

Reporting by Josh White for Sharecast.com.