12th Apr 2016 07:53
LONDON (Alliance News) - EKF Diagnostics Holdings PLC on Tuesday said it has had a positive start to 2016 and expects actions it took to stabilise and rebase its business in 2015 to begin to "bear fruit" in the first half of the year, as it reported a widened pretax loss for 2015.
EKF said 2015 had been a "difficult year" as it streamlined its business to its point-of-care diagnostics and central laboratory tests operations.
EKF reported a pretax loss from continuing operations of GBP15.8 million for 2015, widened from a pretax loss of GBP3.4 million the year before, as revenue fell to GBP30.0 million from GBP37.1 million.
The company had acquired a business called Selah Genomics in 2014, the value of which was based on the reimbursement of genomic testing in the US. However, soon after this acquisition the US government changed its reimbursement policy and cancelled the funding of these tests. As a result EKF opted to sell the Selah business last December to its management for a nominal consideration.
EKF believes the future cost savings from this sale will be around GBP2 million. Its 2015 results treat Selah as a discontinued business.
Elsewhere, the company said it had proven difficult to gain market traction for its other molecular diagnostics business, PointMan. It has halted further development of this business, and staff have been made redundant. EKF said that it has seen third-party interest in buying the PointMan product line, and discussions are ongoing.
Overall restructuring has led to a significant reduction in the company's workforce, with the company's site at Walton-on-Thames being closed, and manufacture and support for its Quo-Test and Quo-Lab products moved to EKF's main production site at Barleben, Germany.
Despite the difficult 2015, EKF was optimistic about the year ahead, saying it expects an adjusted earnings before interest, tax, depreciation and amortisation of between GBP3 million and GBP4 million in 2016, on revenue of just over GBP30 million.
Bolstering this confidence is a positive first quarter of 2016, in which EKF expects revenue to exceed GBP8 million, it said.
"I believe the core operations of EKF are fundamentally sound with good prospects. My desire now is to restore the confidence of our shareholders in our management team, as they rebuild value for all shareholders over the medium term," said Non-Executive Chairman Christopher Mills in a statement.
Shares in EKF were up 19% at 14.88 pence Tuesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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