EKF Diagnostics Holdings PLC Update on strong cash position (5502O)

TIDMEKF

RNS Number : 5502O

EKF Diagnostics Holdings PLC

13 June 2022

EKF Diagnostics Holdings plc

("EKF", the "Company" or the "Group")

Update on strong cash position

EKF Diagnostics Holdings plc (AIM: EKF), the AIM-listed global diagnostics business , provides an update following the strengthening of its cash position.

Within its final results announcement, released on 29 March 2022, the Company disclosed that w orking capital for the period ended 31 December 2021 grew by GBP6.7m, "particularly as a result of additional inventory carried in the USA". This inventory increase included inventory associated with COVID-related contract manufacturing services in the US. The Company can confirm that it has now received a cash payment of $5.5m in relation to this inventory.

The accounting effect of this payment will represent an enhancement to both revenue and adjusted EBITDA for the current financial year ending 31 December 2022, however the quantum of the enhancement is not yet confirmed. Therefore, the Board is not seeking to change guidance to analysts on trading and outlook for 2022 at this stage, but expects to provide an ordinary course of business update within the interim results announcement in September.

The Group's cash, net of borrowings, as at 31 May 2022 increased to GBP21.2m from GBP19.6m at the prior year end. The more recent figure takes into account the receipt of these inventory-related funds, while also reflecting the successful execution of the Company's GBP4m buyback programme (whereby 9,000,000 ordinary shares were bought back and cancelled) and a further GBP2.5m investment in Verici Dx plc (AIM: VRCI).

Commenting Mike Salter, Chief Executive Officer of EKF, said: "We are very pleased to confirm this additional boost to our already strong cash position. The receipt of this cash payment is a significant move towards a clean break from COVID-related services for our Contract Manufacturing business as we transition into new areas. Our strong cash position allows us to continue to execute our strategy of investing for sustainable future growth."

 
EKF Diagnostics Holdings plc                                    www.ekfdiagnostics.com 
Mike Salter, CEO                                              Tel: [phone] 
Marc Davies, CFO 
 
Singer Capital Markets (Nominated Adviser &                   Tel: [phone] 
 Joint Broker) 
Aubrey Powell / George Tzimas 
 
Investec Bank plc (Joint Broker)                              Tel: [phone] 
Gary Clarence / Daniel Adams / Ben 
 Farrow 
 
Walbrook PR Limited                     Tel: [phone] or [e-mail] 
Paul McManus / Lianne Applegarth                Mob: [phone] 
                                                                               391 303 
 
 

About EKF Diagnostics Holdings plc ( www.ekfdiagnostics.com )

EKF is a leading global diagnostics business with custom manufacturing facilities across sites in the US, UK and Europe for a variety of life science products. EKF is focussed on the following areas:

 
 Point-of-Care            Providing a portfolio of Point-of-Care analysers and 
                           consumables, particularly for use in the area of Hematology 
                           and Diabetes, for use in hospital and research laboratories, 
                           doctor's offices, blood banks and for in-field anaemia 
                           screening programmes. EKF has an estimated 80,000 
                           hemoglobin, hematocrit, HbA1c, glucose and lactate 
                           analysers in regular use across more than 100 countries. 
 Central Laboratory       Clinical chemistry, Small lab analysers, Centrifuges 
                           Beta-Hydroxybutyrate (<BETA>-HB) LiquiColor , Glycates 
                           Albumin, Glycated Serum Protein, Nitro-tab, Procalcitonin 
 Life Sciences            Enzyme fermentation, Custom products and Bulk fermentation 
 Contract Manufacturing   Bulk formulation, Sample collection kits, Private 
                           labelling, Molecular and forensic kits 
 Laboratory Services      In September 2021, EKF completed the acquisition of 
                           Advanced Diagnostic Laboratory LLC ("ADL Health"), 
                           a Texas based testing laboratory certified under the 
                           Clinical Laboratory Improvement Amendments ("CLIA") 
                           for high complexity testing. The laboratory provides 
                           testing for a variety of clinical, forensic and microbiological 
                           sample types using a range of analytical techniques. 
                           This acquisition positions EKF as a leading 'one stop' 
                           provider of diagnostic products and services from 
                           sample collection to results. 
 

EKF's growth strategy to 2024 and beyond can be summarised as:

 
 --   continuing innovation in products and services in Point-of-Care, 
       Central Laboratory and Life Sciences leveraging new and existing 
       routes to market and relationships; 
 --   investment in expanded production and kitting capabilities to offer 
       a suite of diagnostic Contract Manufacturing solutions to third 
       party businesses; 
 --   expansion of CLIA Laboratories Testing offering, building on the 
       acquired capabilities in ADL Health; and 
 --   concluding complementary earnings-enhancing acquisitions with key 
       strategic value. 
 

EKF will also continue to generate enhanced shareholder value through:

 
 --   a progressive dividend policy; and 
 --   its agreement with Mount Sinai Innovation Partners ("MSIP"), which 
       allows us advanced access to innovative commercial opportunities 
       and where we can build on the ongoing successes of Renalytix plc, 
       Verici Dx plc and Trellus Health plc. 
 

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June 13, 2022 02:00 ET (06:00 GMT)