Immunodiagnostic Systems Hldgs PLC H1 Trading Update (1104N)

TIDMIDH

RNS Number : 1104N

Immunodiagnostic Systems Hldgs PLC

21 October 2016

H1 Trading Update

Immunodiagnostic Systems Holdings PLC

21 October 2016

Immunodiagnostic Systems Holdings plc

H1 Trading Update

Immunodiagnostic Systems Holdings PLC ("the Group"), a specialist producer of manual and automated diagnostic testing kits and instruments for the clinical market, today provides a trading update for the six months ended 30 September 2016 ("H1 FY2017").

Unaudited Group revenue for H1 FY2017 is expected to be GBP19.5m, in line with the GBP19.4m recognised for the same period last year. On a like for like basis (i.e. at constant scope and constant exchange rates ("CER")) the revenue decreased by 9%. There were no changes in scope, thus the difference is entirely due to changes in exchange rates.

Automated Business

Revenues in our automated CLIA business were GBP9.9m, 8% higher than H1 FY2016. At CER they declined by 2%.

-- At CER, automated 25OH Vitamin D revenue declined at a rate of 25% compared to H1 FY2016. This is similar to the rate of decline experienced in FY2016. This decrease is mainly a result of our main laboratory customers continuing to transfer this assay to workhorse analysers after termination of their contractual obligations with the Group.

The Group's strategy to stop this decline is to expand our menu with CLIA assays not offered by the workhorses. With the number of different assays run on our instruments increasing, the iSYS should continue to be an attractive solution for laboratories to automate their specialty assays.

-- At CER, our automated specialty business (automated business excluding 25OH Vitamin D) grew at a rate of 16% compared to H1 FY2016. This business shows acceleration in growth compared to FY2016, where it grew by 3% at CER versus FY2015.

In H1 FY2017 we released one new automated assay, 17-OH Progesterone, followed by our Total Testosterone assay in mid-October. These are the first products in our IDS-iSYS fertility panel. This brings the total assay menu to 17 assays in Europe and 10 in the USA.

Gross placements of analyzers in markets with direct sales organisations were 15 in H1 FY2017. (H1 FY2016: 9, FY2016 : 31). Net placements, after returns, stood at 5 in H1 FY2017 (H1 FY2016: minus 10, FY2016: minus 12). We believe these developments provide an early indication that the efforts to improve the sales processes are beginning to bear fruit.

Manual Business

Manual assay revenues were GBP6.2m, a decline of 2% compared to H1 FY2016. At CER the decline amounted to 11%. The majority of the decline is caused by lower 25OH Vitamin D revenues - which declined by 40% at CER. Revenue in the remainder of the manual business was flat at CER compared to the same period in the prior year.

Licensing and Technology Business

Licensing and Technology revenues are expected to be GBP3.3m, a decline of 14% compared to H1 FY2016. At CER the decline amounted to 23%. This reduction is due to the anticipated decline in royalty income from a major customer. This decline will continue into the second half of the year. Royalty income is accrued based on preliminary estimates provided by our customers, and is thus subject to revision.

As of 30 September 2016 the Group employed 294 people on a full time employment basis (30 September 2015: 328, 31 March 2016: 315). This headcount reduction reflects the Group's cost saving initiatives which are on track and aim to create savings of GBP3.5m p.a. compared to FY2016. The associated restructuring costs amount to approximately GBP1.5m and have been booked in FY2017 H1 as a one-off charge.

Closing cash and cash equivalents are expected to be around GBP28.7m at 30 September 2016 (30 September 2015: GBP23.5m, 31 March 2016 2016: GBP26.6m).

The management team continues to focus its efforts on improving our sales processes and capabilities, as well as strengthening our product pipeline through internal development and external partnerships. The next intermediate goal is to stabilize the revenue line on a like for like basis.

The Group expects to announce its unaudited interim results on 25 November 2016.

This announcement includes inside information.

For further information:

   Immunodiagnostic Systems Holdings plc                          Tel : [phone] 

Patricio Lacalle, Chief Executive Officer

Paul Martin, Group Finance Director

Peel Hunt LLP Tel : [phone]

James Steel

Oliver Jackson

This information is provided by RNS

The company news service from the London Stock Exchange

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October 21, 2016 02:00 ET (06:00 GMT)