Immunodiagnostic Systems Hldgs PLC Trading Update (9207C)

TIDMIDH

RNS Number : 9207C

Immunodiagnostic Systems Hldgs PLC

21 April 2017

Trading Update

Immunodiagnostic Systems Holdings PLC

21 April 2017

Immunodiagnostic Systems Holdings plc

Trading Update for the year ended 31 March 2017

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 financial year ended 31 March 2017.

Total Group revenue is expected to be approximately GBP40m, an increase of around 4% compared to the previous year. This reported revenue number has been favorably impacted by the weakening of the pound against the Euro and US Dollar. At constant exchange rates ("CER") the revenue decreased by around 8%. There were no changes in scope during the last financial year, thus these numbers are like for like.

Automated Business

Revenues in our automated CLIA business are expected to be approximately GBP21.4m, approximately 3% higher than the prior year at CER.

-- Automated 25OH Vitamin D revenue of approximately GBP6.8m represents a decline of around 17% at CER compared to the prior year. While this business continues to decline, the rate of decline is lower than we have seen in previous years. 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.

-- Automated specialty business (automated business excluding 25OH Vitamin D) revenue of approximately GBP13.3m represents a growth of around 16% at CER compared to the prior year. This growth was generated by multiple products, and hence the business is developing a more diversified product base, which should lay the foundations for future growth.

During the year we were pleased to launch four new CLIA automated assays for the IDS iSYS analyser. This brings the total assay menu with a CE-mark up to nineteen assays, and represents a 25% expansion of the assay menu during the year. The rate of four new CE-marked product launches is up from one in the previous financial year, but we missed our internal goal of six new launches.

In the USA we were able to get clearance for one new assay, bringing the number of assays up to ten. In China the number of CFDA-cleared assays stayed unchanged at four.

Annual gross placements of analyzers in markets with direct sales organizations were 40 (Prior Year: 31). Just as importantly, we were able to reduce the number of returns to 24 (Prior year: 43). Thus net placements after returns - the core KPI signaling our potential for resumed growth - stood at 16 (Prior Year: minus 12).

Another KPI we are monitoring is the average number of assays run on an iSYS analyzer as a larger number increases our revenues per instrument and increases customer retention. This KPI increased from 3.9 to 4.3 over the year, reflecting the ability of our sales organization for upselling.

We believe the positive progression of the KPIs outlined above reflects the progress made during the course of the year. Our roadmaps for R&D, sales and marketing are clearly outlined and our management team is working on getting better on the respective processes each month. We are therefore optimistic that this progress will continue into the next year.

Manual Business

Manual assay revenues are expected to be approximately GBP12.7m, 11% lower at CER than the prior year. The majority of the decline is caused by lower 25OH Vitamin D revenues - which declined by around 36% at CER. Revenue in the remainder of the business declined by around 4% at CER.

During the year our actions taken to stem the decline resulted in a slowdown in the downward trend. During the coming year we aim to place more emphasis on building the sales processes and distribution channels related to our manual business. Our goal is to halt the decline at CER.

Licensing and Technology Business

Licensing and Technology revenues are expected to be approximately GBP5.9m, a decline of around 30% at CER compared to the prior year. Within this business, royalty income - based on monetizing our know-how and IP in biologics - is expected to be GBP2.8m, equating to a 53% decline at CER. However income from technology partners - based on monetizing our instrument technology - increased to GBP3.1m, which is a 23% increase at CER.

Royalty income is accrued based on preliminary estimates provided by our customers, and is thus subject to revision. We do not expect to see significant royalty income during the next financial year, thus expect to see a continued decline in the license and technology revenues in the next year, in accordance with guidance provided by the Group since June 2016.

As of 31 March 2017 the Group employed 275 people on a full time employment basis (31 March 2016: 315).

Closing cash and cash equivalents are expected to be around GBP31.5m (31 March 2016: GBP26.6m).

The management team is encouraged by these results, which are above our expectations for the year. They reflect the hard work which has been undertaken to stabilize the performance of the Group after deteriorating financial and operational performance in previous years. We would therefore like to thank all our staff for the extraordinary effort they put in to effect this turn-around.

Preliminary results for the year ended 31 March 2017 will be announced on 21 June 2017.

This announcement includes inside information.

For further information:

   Immunodiagnostic Systems Holdings plc                         Tel : [phone] 

Regis Duval, 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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April 21, 2017 02:00 ET (06:00 GMT)