3rd Feb 2016 09:45
LONDON (Alliance News) - EKF Diagnostics Holdings PLC said Wednesday its 2015 trading was in line with the reduced guidance it issued in November.
The point-of-care diagnostics business saw its shares half in November, after it warned its pretax profit for 2015 would be hit by write-downs of between GBP55.0 million and GBP60.0 million of previously capitalised intangible assets and goodwill, as well as by provisions against Mexican debtors.
In an update on Wednesday, EKF Diagnostics Chairman Ron Zwaniger said the company was trading in line with this guidance, but was cutting costs in order to bring it to core profitability and positive cash flow. The company sold its loss-making molecular business Selah and has reduced headcounts at its Stanbio and Barleben facilities.
Due to this, Zwaniger said, headcount was down by 85, to 315, and the company expects to achieve cost savings of GBP6.7 million on an annualised basis.
He added he anticipates core revenue for 2016 of just over GBP30 million, excluding the company's "Achilles heel" tender business, and the company to be cash positive by April 2016, despite cash remaining tight in the first quarter due to the impact of restructuring costs.
"The board believe that we can and should achieve more, but we have decided that we are unable to accurately forecast the tender business due to the vagaries of public funding, leading to delays and postponements," Zwaniger said.
"It is my ambition to make this company a major player in point-of-care," he added.
EKF Diagnostics shares were up 9.1% at 9.00 pence on Wednesday.
By Hannah Boland; [email protected]; @Hannaheboland
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