28th Aug 2014 12:33
LONDON (Alliance News) - Cyprotex PLC Thursday said it swung to a loss in the first half, due in part to acquisition-related costs.
The biotechnology company posted a pretax loss of GBP428,337 for the six months to June 30, compared with a GBP271,802 profit a year earlier, even as revenue rose 19% to GBP5.4 million from GBP4.6 million.
Revenue were higher mainly driven by revenues associated with the CeeTox acquisition, but also from some growth from the existing business. Contract research organisation CeeTox was acquired in January for an initial consideration of GBP630,000.
However, Cypotex incurred a number of one-off additional costs associated with the CeeTox deal, including restructuring, loyalty payments and legal fees worth GBP170,000.
Meanwhile, the combined effect of a reduction in gross margin, increased staffing costs to accomplish either research and development, additional infrastructure costs from operating on four sites, increasing depreciation charges, share-based payment charges and one-off charges associated with the acquisition of the business and trade of CeeTox all reduced operating profitability.
The group reported an operating loss of GBP584,000 compared with a GBP317,000 profit a year earlier.
Macclesfield-based Cyprotex said gross margin fell to 78.8% from 81.1% a year earlier with increased outsourcing to partners in the first half.
Cyprotex said it is pleased with the integration of Ceetox and the number of new customer that it now serves.
"The fact that most of these new customers are in the Cosmetics/Personal Care and Industrial Chemicals sectors further enhances the potential volume of business that we already derive from our more traditional Pharma, Biotech and Agrochemical customers," the company said.
The stock was quoted down 11% at 55.00 pence Thursday.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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