Immunodiagnostic Systems Hldgs PLC AGM Statement (7912V)

TIDMIDH

RNS Number : 7912V

Immunodiagnostic Systems Hldgs PLC

26 July 2018

AGM Statement

Immunodiagnostic Systems Holdings PLC

26 July 2018

Immunodiagnostic Systems Holdings plc

AGM Statement

Immunodiagnostic Systems Holdings PLC ("IDS" or "the Group"), a specialist producer of manual and automated diagnostic testing kits and instruments for the clinical and research markets, will today hold its Annual General Meeting at 2pm at its registered office at 10 Didcot Way, Boldon Business Park, Boldon, Tyne & Wear, NE35 9PD. At the meeting the Chairman, Dr. Burkhard Wittek, will make the following statement to shareholders:

"Unaudited group revenues for Q1 FY19 are GBP9.3m, 4% lower than the same period last year. On a like for like basis ("LFL"), that is at constant exchange rate, Group revenues declined by 3%.

Revenue Performance in Q1 FY19

The table below summarizes the unaudited revenue performance of the core segments of our business:

 
                                                        Revenue                              LFL Change 
                                                        Q1 FY19                 Q1 FY19 v                FY18 v FY17 
                                                                                 Q1 FY18 
                                          ----------------------  -----------------------  ------------------------- 
              Group                                     GBP9.3m                    -3%                       -8% 
                                          ----------------------  -----------------------  ------------------------- 
 
              Automated business                        GBP5.4m                    -8%                       4% 
                                          ----------------------  -----------------------  ------------------------- 
                  25-OH Vitamin D                       GBP1.4m                   -19%                       -8% 
                                          ----------------------  -----------------------  ------------------------- 
                  Speciality - IDS                      GBP3.3m                    -5%                       5% 
                                          ----------------------  -----------------------  ------------------------- 
                  Speciality - Partners                 GBP0.3m                    5%                        24% 
                                          ----------------------  -----------------------  ------------------------- 
                  Instrument sales and 
                   service                              GBP0.4m                    6%                        43% 
                                          ----------------------  -----------------------  ------------------------- 
 
              Manual business                           GBP3.0m                    -7%                       -6% 
                                          ----------------------  -----------------------  ------------------------- 
              Technology business                       GBP0.9m                    67%                      -55% 
                                          ----------------------  -----------------------  ------------------------- 
 

Automated business

This business continues to be impacted by the challenges set out in our 2018 Annual Report - namely the rebuilding of our direct sales team in Europe and delays in product registrations. Revenue declined 8% on a

LFL basis.   The decline was mainly due to two reasons: 
   --      a reduction in 25-OH Vitamin D assay volumes; and 
   --      returns of machines from customers running just one Speciality IDS assay 

The key strategy response in both instances is to increase the number of assays running on our installed base. The average number of assays run on an instrument continues to increase, reaching 4.8 in the quarter (Q1 FY18: 4.3). However, this average still contains a significant number of analyzers running just one assay, exposing the Group to the risk of further returns.

The Speciality Partners revenue relates mainly to our Autoimmune assay range. During the quarter we obtained CE marking under the IDS brand for these assays. Now that we have the IDS branded product range available for sale throughout the EU, we aim to accelerate the growth in this area during the remainder of the year.

During the quarter we placed or sold 8 machines (Q1 FY18: 12) in our direct market, and 10 (Q1 18: 5) via our distributors bringing the total number to 18 (Q1 FY18: 17). Returns in the quarter in our direct sales territories were 8 (Q1 FY18: 4) meaning that in our direct sales markets the number of machines remained constant (FY18 Q1: net placements of 8).

Manual business

The manual business declined at 7% LFL, comparable with last year. Nevertheless, we are starting to see some results from the efforts of the new commercial team in this business. During the last six months we have signed up an additional 13 overseas distributors for our manual products. We are currently completing the product registration process, and anticipate that we will see revenues from these new territories in the second half of the year.

Technology business

Growth in the technology business has been driven by large volume orders for analyzers by one OEM partner, as they prepare for the commercial launch of their product offering. Revenue levels in this business unit for the remainder of the year will largely be driven by the success of this partner's product roll out.

Other KPIs

Unaudited closing cash and cash equivalents were GBP29.8m as at 30 June 2018 (31 March 2018: GBP28.5m), the growth driven by favorable working capital movements.

At 30 June 2018 the Group employed 276 people on a full time employment basis (31 March 2018: 281 people).

Outlook

The target we set in our FY18 Annual Report of returning to LFL revenue growth in FY19 is a challenging but achievable task. We believe we have made sufficient progress in rebuilding the sales team and generating opportunities in the sales pipeline, in both our automated and manual businesses, to improve the trajectory of the business over the course of the year and continue to maintain this guidance for the current year.

For further information:

   Immunodiagnostic Systems Holdings plc                             Tel : [phone] 

Jaap Stuut, Chief Executive Officer

Paul Martin, Group Finance Director

Peel Hunt LLP Tel : [phone]

James Steel

Oliver Jackson

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July 26, 2018 02:00 ET (06:00 GMT)