EKF Diagnostics (EKF) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 was £25.2m, down from £26.9m in H1 2023, due to the wind-down of non-core and low-margin lines.

• Gross profit increased to £12.1m from £11.8m, with gross margin improving to 48% from 44% year-over-year.

• Adjusted EBITDA rose 22.7% to £5.4m, and profit before tax returned to £3.1m from a small loss in H1 2023.

• Cash generated from operations was £7.9m, up from £2.5m, and net cash at period end improved to £9.8m.

• The business remains confident in meeting full-year expectations, with further improvements anticipated in H2 2024.

Financial highlights

• Revenues of £25.2m in line with market expectations; core revenue (excl. COVID/clinical chemistry): £24.5m.

• Gross profit: £12.1m (H1 2023: £11.8m); gross margin improved to 48.1% (H1 2023: 44.0%).

• Adjusted EBITDA: £5.4m (H1 2023: £4.4m); operating profit: £3.1m (H1 2023: loss of £0.07m).

• Overheads/administrative expenses reduced by £1.9m annually, now £9.2m (H1 2023: £10.9m).

• Basic EPS: 0.46p (H1 2023: loss of 0.08p); net cash at period end: £9.8m.

Outlook and guidance

• Full-year guidance unchanged; management expects continued improvement in gross margins, earnings, and cash generation in H2 2024.

• Continued CapEx investment in core products expected to drive sustainable growth.

• High growth anticipated in Hematology Point-of-Care business, with focus on new blood bank and tender opportunities.

• Life Sciences fermentation and B-HB sales expected to sustain growth; Diabetes portfolio unlikely to exceed 2023 revenue.

• Confident in improved Point-of-Care performance in EMEA and further enzyme development in Life Sciences.