29th Jan 2025 11:42
(Alliance News) - hVIVO PLC on Wednesday released an optimistic pre-annual results trading update, and said it expects "further strong growth" next year.
However, the stock was down 7.4% at 18.89 pence per share late on Wednesday morning in London.
hVIVO expects to release its 2024 results in mid-April.
The London-based contract research organisation (CRO) also announced its purchase of two clinical research units from CRS Clinical Research Services Management GmbH, a German full-service early-stage clinical development CRO.
hVIVO said consideration for the units totalled EUR10.0 million, funded using its existing cash resources. It expects the acquisition to be earnings-accretive in 2026.
Also, ahead of its results for the year ended December 31, hVIVO said it expects to report a "record" GBP62.7 million in revenue, up 12% from GBP56.0 million the year before.
The company also expects an earnings before interest, tax, depreciation and amortisation margin of approximately 26%, up on-year from 23.3%.
"The significant uplift in revenue and margins was driven by strong operational delivery including recruitment of record number of human challenge trial participants and improved utilisation rates (particularly in H124), delivery of the group's largest phase 2 field study to date, and recognition of GBP4.3 million client funding towards the new Canary Wharf facility to accelerate delivery of client studies," hVIVO explained.
Looking ahead, hVIVO expects to generate GBP73 million in revenue for 2025, "representing a robust year-on-year performance of the core business...but including revenues expected to be generated by CRS". Also, it expects to remain cash-generative with an Ebitda margin in the mid-teens.
"The group expects to deliver strong revenue growth in 2026 and a significant improvement on Ebitda margins following the integration of CRS," hVIVO added.
Chief Executive Officer Yamin Khan meanwhile said: "Overall, the mid- and long-term outlook for the group is excellent. We have laid foundations for future growth, expanded our service offerings organically and diversified to a wider range of revenue streams through the CRS acquisition.
"As such, I believe we have significantly strengthened and diversified the business and have enhanced our ability to deliver our target of growing Group revenue to GBP100 million by 2028."
By Emma Curzon, Alliance News reporter
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