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Novacyt S.A. (EURONEXT GROWTH:ALNOV; LSE:NCYT), a leading international molecular diagnostics company, has reported its unaudited interim results for the six-month period ending June 30, 2024. The company demonstrated significant growth in key areas, largely driven by its acquisition of Yourgene Health and its focus on expanding diagnostic services beyond COVID-19.
For the first half of 2024, Novacyt recorded group revenue of £10.3 million, with £7.8 million coming from Yourgene Health, a company acquired in late 2023. In contrast, group revenue for the same period in 2023 stood at £3.3 million, with only £0.5 million attributed to COVID-19-related sales. When excluding COVID-19 sales, proforma revenue for H1 2023 was £11.4 million, highlighting the impact of the company's transition from pandemic-related diagnostics to a broader portfolio of services. Particularly notable was the 34% year-on-year growth in reproductive health services and a 5% increase in non-invasive prenatal testing (NIPT), showcasing Novacyt’s expansion into new and sustainable healthcare markets.
The company’s gross profit surged to £26.5 million in H1 2024, a significant improvement from £1.7 million in H1 2023. This increase was largely due to the reversal of a £19.8 million product warranty provision following the successful settlement of a dispute with the UK’s Department of Health and Social Care (DHSC). The underlying gross margin of the business rose to 65%, indicating strong financial performance despite ongoing challenges.
However, the company's operating costs also saw a sharp rise to £32.1 million in H1 2024, compared to £7.0 million in the same period in 2023. This was primarily due to a £20 million bad debt write-off following the DHSC settlement. Despite these increased costs, Novacyt successfully achieved £5.0 million in annualized savings from its acquisition of Yourgene, reducing underlying operating expenses to £12.1 million, down from the proforma £14.7 million in H1 2023.
Novacyt reported a group EBITDA loss before exceptional items of £5.6 million, with £0.2 million of this directly related to the DHSC settlement. This compares to a £5.4 million EBITDA loss in H1 2023. Exceptional costs for H1 2024 totaled £8.1 million, including the £5.0 million settlement to the DHSC, which was paid in July. This resulted in a post-tax loss of £17.7 million, an increase from the £8.3 million loss in H1 2023.
Despite these losses, Novacyt remains in a strong financial position with a cash balance of £32.9 million as of June 30, 2024, down from £44.1 million at the end of 2023. The company remains debt-free, and its cash reserves were further bolstered post-period, reaching £36.6 million by the end of August 2024, thanks to a successful VAT claim of £12.2 million from HMRC related to unpaid DHSC invoices.
In addition to its financial performance, Novacyt saw important leadership changes and operational milestones. Lyn Rees, the former CEO of Yourgene Health, was appointed as the company’s Chief Executive Officer, bringing over 28 years of global healthcare experience. Steve Gibson joined as Chief Financial Officer, while Dr. Jo Mason assumed the role of Chief Scientific Officer. John Brown CBE was named Chairman of the Board, further strengthening the company’s leadership team.
Operational highlights include the submission of IVDR certification applications for key diagnostic tests developed by Yourgene, such as the Cystic Fibrosis Base and the QST*R Base Rapid Aneuploidy Analysis tests. Novacyt also launched a real-time PCR workflow for the rapid detection of norovirus in oysters, and completed the sale of its Taiwanese laboratory business, reflecting its focus on core markets.
