REG - EKF Diagnostics Hldg - Update on strong cash position

EKF Diagnostics HoldingsAnnouncement

13/06/2022 07:00

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RNS Number : 5502O  EKF Diagnostics Holdings PLC  13 June 2022

EKF Diagnostics Holdings plc

("EKF", the "Company" or the "Group")

 

Update on strong cash position

 

EKF Diagnostics Holdings plc (AIM: EKF), the AIM-listed global diagnostics
business, provides an update following the strengthening of its cash position.

 

Within its final results announcement, released on 29 March 2022, the Company
disclosed that working capital for the period ended 31 December 2021 grew by
£6.7m, "particularly as a result of additional inventory carried in the USA".
This inventory increase included inventory associated with COVID-related
contract manufacturing services in the US. The Company can confirm that it has
now received a cash payment of $5.5m in relation to this inventory.

 

The accounting effect of this payment will represent an enhancement to both
revenue and adjusted EBITDA for the current financial year ending 31 December
2022, however the quantum of the enhancement is not yet confirmed. Therefore,
the Board is not seeking to change guidance to analysts on trading and outlook
for 2022 at this stage, but expects to provide an ordinary course of business
update within the interim results announcement in September.

 

The Group's cash, net of borrowings, as at 31 May 2022 increased to £21.2m
from £19.6m at the prior year end. The more recent figure takes into account
the receipt of these inventory-related funds, while also reflecting the
successful execution of the Company's £4m buyback programme (whereby
9,000,000 ordinary shares were bought back and cancelled) and a further £2.5m
investment in Verici Dx plc (AIM: VRCI).

 

Commenting Mike Salter, Chief Executive Officer of EKF, said: "We are very
pleased to confirm this additional boost to our already strong cash position.
The receipt of this cash payment is a significant move towards a clean break
from COVID-related services for our Contract Manufacturing business as we
transition into new areas. Our strong cash position allows us to continue to
execute our strategy of investing for sustainable future growth."

 

 

 EKF Diagnostics Holdings plc               www.ekfdiagnostics.com (http://www.ekfdiagnostics.com)
 Mike Salter, CEO                            Tel: +44 (0)29 2071 0570
 Marc Davies, CFO

 Singer Capital Markets (Nominated Adviser & Joint Broker)                           Tel: +44 (0)20 7496 3000
 Aubrey Powell / George Tzimas

 Investec Bank plc (Joint Broker)           Tel: +44 (0)20 7597 4000
 Gary Clarence / Daniel Adams / Ben Farrow

 Walbrook PR Limited                        Tel: +44 (0)20 7933 8780 or ekf@walbrookpr.com (mailto:ekf@walbrookpr.com)
 Paul McManus / Lianne Applegarth           Mob: +44 (0)7980 541 893 / +44 (0)7584 391 303

 

About EKF Diagnostics Holdings plc (www.ekfdiagnostics.com
(http://www.ekfdiagnostics.com) )

EKF is a leading global diagnostics business with custom manufacturing
facilities across sites in the US, UK and Europe for a variety of life science
products. EKF is focussed on the following areas:

 

 Point-of-Care             Providing a portfolio of Point-of-Care analysers and consumables, particularly
                           for use in the area of Hematology and Diabetes, for use in hospital and
                           research laboratories, doctor's offices, blood banks and for in-field anaemia
                           screening programmes. EKF has an estimated 80,000 hemoglobin, hematocrit,
                           HbA1c, glucose and lactate analysers in regular use across more than 100
                           countries.

 Central Laboratory        Clinical chemistry, Small lab analysers, Centrifuges

                           Beta-Hydroxybutyrate (β-HB) LiquiColor, Glycates Albumin, Glycated Serum
                           Protein, Nitro-tab, Procalcitonin

 Life Sciences             Enzyme fermentation, Custom products and Bulk fermentation

 Contract Manufacturing    Bulk formulation, Sample collection kits, Private labelling, Molecular and
                           forensic kits

 Laboratory Services       In September 2021, EKF completed the acquisition of Advanced Diagnostic
                           Laboratory LLC ("ADL Health"), a Texas based testing laboratory certified
                           under the Clinical Laboratory Improvement Amendments ("CLIA") for high
                           complexity testing. The laboratory provides testing for a variety of clinical,
                           forensic and microbiological sample types using a range of analytical
                           techniques. This acquisition positions EKF as a leading 'one stop' provider of
                           diagnostic products and services from sample collection to results.

 

EKF's growth strategy to 2024 and beyond can be summarised as:

 •    continuing innovation in products and services in Point-of-Care, Central
      Laboratory and Life Sciences leveraging new and existing routes to market and
      relationships;
 •    investment in expanded production and kitting capabilities to offer a suite of
      diagnostic Contract Manufacturing solutions to third party businesses;
 •    expansion of CLIA Laboratories Testing offering, building on the acquired
      capabilities in ADL Health; and
 •    concluding complementary earnings-enhancing acquisitions with key strategic
      value.

 

EKF will also continue to generate enhanced shareholder value through:

 •    a progressive dividend policy; and
 •    its agreement with Mount Sinai Innovation Partners ("MSIP"), which allows us
      advanced access to innovative commercial opportunities and where we can build
      on the ongoing successes of Renalytix plc, Verici Dx plc and Trellus Health
      plc.

 

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