Novacyt (ALNOV) H1 2024 earnings summary

Executive summary

• Revenue rose to £10.3m in H1 2024 from £3.3m in H1 2023, driven by strong growth in reproductive health and NIPT segments, and the inclusion of Yourgene Health sales post-acquisition.

• Successfully resolved the DHSC dispute, resulting in a £5.0m settlement, £7m net cash inflow, and a £19.8m reversal of product warranty provision.

• Integration of Yourgene Health is ahead of schedule, with over £5.0m in annualized cost savings expected by end of FY 2025, enhancing global diagnostics capabilities.

• Net loss widened to £17.7m, mainly due to exceptional DHSC-related costs and a £20.0m bad debt write-off.

• Strategic focus is on organic growth, R&D investment, and product innovation, with no current plans for M&A.

Financial highlights

• H1 revenue increased 209% year-over-year to £10.3m, driven by Yourgene sales post-acquisition.

• Underlying gross profit rose to £6.7m, with margin improving to 65% from 50% year-over-year.

• EBITDA loss was £5.6m, broadly flat year-over-year, as gross profit gains were offset by exceptional DHSC-related costs.

• Group reported a loss after tax of £17.7m in H1, mainly due to exceptional DHSC-related costs.

• Cash position at period end was £32.9m, with a closing cash balance of £36.5m by end of August after VAT refund.

Outlook and guidance

• Confident in reaching profitability with current cash reserves and ongoing cost savings; no additional external funding forecast through September 2025.

• Further product launches and R&D investments planned, with detailed guidance and product timelines to be provided in H1 next year.

• IVDR certification is expected to be a key differentiator, reducing competition and price pressure.