REG - hVIVO PLC - Trading update

hVIVOAnnouncement

17/07/2024 07:00

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RNS Number : 6561W  hVIVO PLC  17 July 2024

hVIVO plc

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

 

Trading update

Record H1 revenue and EBITDA margin

 

hVIVO plc (AIM & Euronext: HVO), a fast-growing specialist contract
research organisation (CRO) and world leader in testing infectious and
respiratory disease products using human challenge clinical trials, provides a
trading update for the six-month period ended 30 June 2024.

 

Highlights

 •    Revenue of £35.6 million, 30.6% higher than H1 2023 (£27.3 million). The
      Board remains confident in delivering on market expectations for the full year
 •    EBITDA margin of c.24% (H1 2023: 19.1%)
 •    Cash of £37.1 million as at 30 June 2024 (30 June 2023: £31.3 million)
 •    Weighted contracted orderbook of £71 million as at 30 June 2024 (30 June
      2023: £78 million), post-delivery of a record £35.6 million in revenues in
      H1 2024
 •    Quarantine facility in Canary Wharf now fully operational providing the
      foundation and capacity for future growth
 •    Full year revenue guidance of £62 million reaffirmed with full year EBITDA
      margins anticipated to be at the upper end of market expectations

 

Strong operational delivery drives revenue and margin growth

 

The Group expects to report first half revenues of £35.6 million representing
30.6% revenue growth on H1 2023. This was driven by exceptional operational
delivery across the Group, particularly a record number of volunteer
inoculations across multiple studies and a variety of challenge models running
simultaneously.

 

hVIVO's services continue to be in high demand across several different
challenge models. During the period the Group was able to utilise its three
quarantine facilities to deliver a number of projects ahead of schedule which
provided a boost to revenues and margins. This has contributed to a H1 revenue
weighting for 2024, from July 2024 the Group will solely operate from its
Canary Wharf quarantine site.

 

The Group expects to report H1 2024 EBITDA margins of c.24% (H1 2023: 19.1%),
due to enhanced operational efficiencies, good utilisation of the overlapping
quarantine facilities, and continued improvement in FluCamp delivery. The
increase in margins is a positive indicator of the margin achievable in the
medium term for the business with the Canary Wharf site expected to deliver
improved operational efficiencies. The Group's cash position as at 30 June
2024 was £37.1 million (30 June 2023: £31.3 million) following the payment
of its annual dividend to shareholders of c.£1.4 million in May 2024.

 

Orderbook provides visibility into 2025

 

The Company's weighted contracted orderbook stood at £71 million as at 30
June 2024 (30 June 2023: £78 million), with 100% of FY 2024 revenue guidance
already contracted and good visibility into 2025. The orderbook value as at 30
June 2024 reflects the exceptional operational delivery of £35.6 million
revenue in H1 2024, including the acceleration of several projects
contributing to a faster conversion of contracted work versus previous
periods. hVIVO has a broad pipeline of live opportunities, including a number
in advanced stages, making the Group well-positioned to increase its weighted
orderbook going forward.

 

Outlook

The move to the new facility in Canary Wharf positions the Group for growth
with increased quarantine capacity and containment level 3 (CL-3) capability.
This enables hVIVO to broaden its core human challenge trial offering to
include new pathogen models. The Group continues to focus on diversifying its
service offering which it expects to positively impact its growth and margins
by improving staff utilisation and leveraging its in-house expertise, existing
facilities and capabilities. These services include Phase II and Phase III
field studies, volunteer recruitment services, and standalone hLAB services
(including BSL-3 level capability). The Group recently announced its largest
field study contract to date where hVIVO was selected as the sole UK clinical
site for this multicentre study to enrol up to 1,000 volunteers.

 

The Group reaffirms its full year revenue guidance of £62 million and
anticipates that EBITDA margins will be at the upper end of market
expectations on the basis of the strong performance in the first half of 2024
and full visibility for the remainder of the year. Its organic growth strategy
is also underpinning the Group's medium-term revenue target of £100 million
by 2028, the majority of which is expected to be achieved through sustained
organic growth complemented by small, strategic bolt on acquisitions.

 

Yamin 'Mo' Khan, Chief Executive Officer of hVIVO, said: "The results of H1
2024 reflect the hard work, flexibility and commitment of the team. During a
period of significant activity including the build-out and move to a new
facility, we have not only materially increased our revenue but also further
improved our margins. The concurrent running of three different facilities
helped to boost our revenues for H1 2024, creating an expected H1 2024
weighting.

 

"We have full visibility over our expected 2024 revenues and continue to
deliver on our sustainable growth strategy. The orderbook remains strong in
spite of record revenue delivery in H1 2024. The recent Omicron
characterisation study contract and the award of our largest field study to
date are two key sales highlights for H1 2024. In addition, the current sales
pipeline includes several advanced stage opportunities that we expect to
convert in the coming months.

 

"The outlook for hVIVO is positive as we welcomed our first volunteers into
our new facility at Canary Wharf - the world's largest human challenge trial
unit. I believe we have laid the foundations for strong performance in the
months and years ahead."

 

Capital Markets Event

 

The Group is holding a Capital Markets Event at the Company's new
state-of-the-art facility in Canary Wharf today at 10.00 am - 12.30 pm (BST).
The event will focus on the capabilities of the world's largest human
challenge trial unit and how it will enhance and broaden hVIVO's services, as
well as covering the Group's trading update.

 

Analysts, institutional investors and media are welcome to attend the
in-person event. Due to restrictions on numbers, it will not be possible for
all interested parties to attend in-person, however, a live webcast will be
available on the Company's website for retail investors and others to view the
presentations here
(https://stream.brrmedia.co.uk/broadcast/666c6274ee30aaf32018b8d1) .

 

To register your interest for the event or webcast, please contact Walbrook PR
on +44 20 7933 8780 or email hvivo@walbrookpr.com
(mailto:hvivo@walbrookpr.com) . A recording of the presentation will be made
available on the Company's website after the event.

 

For further information please contact:

 

 hVIVO plc                                       +44 (0) 20 7756 1300
 Yamin 'Mo' Khan, Chief Executive Officer

 Stephen Pinkerton, Chief Financial Officer

 Cavendish Capital Markets Limited (Nominated Adviser and Joint Broker)                  +44 (0) 20 7220 0500
 Geoff Nash, Charlie Beeson, Nigel Birks, Harriet Ward

 Peel Hunt LLP (Joint Broker)                                        +44 (0)20 7418 8900
 James Steel, Dr Christopher Golden

 Davy (Euronext Growth Adviser and Joint Broker)                     +353 (0) 1 679 6363
 Anthony Farrell, Niall Gilchrist

 Walbrook PR (Financial PR & IR)                 +44 (0) 20 7933 8780 or hvivo@walbrookpr.com

 Stephanie Cuthbert / Phillip Marriage /         +44 (0) 7796 794 663 / +44 (0) 7867 984 082 /

Louis Ashe-Jepson
+44 (0) 7747 515 393

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
("MAR") EU no.596/2014. Upon the publication of this announcement via
Regulatory Information Service ("RIS"), this inside information is now
considered to be in the public domain.

 

Notes to Editors

 

About hVIVO

 

hVIVO plc (http://www.hvivo.com) (ticker: HVO) is a fast growing specialist
contract research organisation (CRO) and the world leader in testing
infectious and respiratory disease vaccines and therapeutics using human
challenge clinical trials. The Group provides end-to-end early clinical
development services to its large, established and growing repeat client base,
which includes four of the top 10 largest global biopharma companies.

 

The Group's fast-growing services business includes a unique portfolio of 11
human challenge models, with a number of new models under development, to test
a broad range of infectious and respiratory disease products. The Group has
world class challenge agent manufacturing capabilities, specialist drug
development and clinical consultancy services via its Venn Life Sciences
brand, and a lab offering via its hLAB brand, which includes virology,
immunology biomarker and molecular testing. The Group also offers additional
clinical field trial services such as patient recruitment and clinical trial
site services.

 

hVIVO runs challenge trials in London - its new state-of-the-art facilities
in Canary Wharf opened in 2024 and is the world's largest commercial human
challenge trial unit, with highly specialised on-site virology and immunology
laboratories, and an outpatient unit. To recruit volunteers / patients for its
studies, the Group leverages its unique clinical trial recruitment capability
via its FluCamp (http://www.flucamp.com/) volunteer screening facilities
in London and Manchester.

 

 

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