REG - Novacyt S.A. - Full Year 2024 Results
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RNS Number : 7156G Novacyt S.A. 30 April 2025
Novacyt S.A.
("Novacyt", the "Company" or the "Group")
Full Year 2024 results
Paris, France, and Manchester, UK - 30 April 2025 - Novacyt S.A. (EURONEXT
GROWTH: ALNOV; AIM: NCYT), an international molecular diagnostics company with
a broad portfolio of integrated technologies and services, announces its
audited results for the year ended 31 December 2024.
The Company has a broad technology portfolio divided into three business
segments: Clinical, Instrumentation and Research Use Only ('RUO'). These
business segments trade within Yourgene Health ("Yourgene") (78% of total
sales FY24) and Primer Design (22% of total sales FY24), focused on the
development and commercialisation of clinical products and RUO assays
respectively.
Financial Highlights
· Group statutory revenue for FY2024 was £19.6m, in line with guidance,
representing a YoY growth of 85%, driven by the acquisition of Yourgene
(FY2023*: £10.6m)
· Yourgene delivered solid growth in both the clinical and instrumentation
segments, including:
- Reproductive Health up 26% YoY on a proforma basis
- Ranger ® Technology ("Ranger") consumables up 13% YoY on a
proforma basis
· Primer Design was broadly flat YoY (excluding COVID sales), delivering sales
of £4.3m in FY2024
· Group gross profit totalled £32.1m (163% margin) in FY2024 (FY2023*: £3.5m
(33% margin)). The inflated gross profit was driven by the reversal of the
£19.8m product warranty provision following the settlement with the DHSC.
Removing the impact of this one-time entry, the underlying gross profit grew
to £12.3m or 63% margin
· Group EBITDA loss in FY2024 totalled £9.1m before exceptional items (FY2023*:
£11.8m loss)
· Loss after tax increased to £41.8m in FY2024 (FY2023: £28.3m loss),
predominantly driven by an increase in exceptional charges
· A key benefit of the strategic Yourgene acquisition was £5.0m of estimated
cost synergies that would be delivered by the end of year three. Management
have been able to successfully deliver these within 18 months of the
acquisition
· The Group remains on track to deliver an incremental £3.0m of annual EBITDA
improvements through the various site consolidation activities (IT-IS
International closure, Canadian manufacturing relocation and Primer Design
site relocation) which are planned to be concluded by the end of 2025
· Cash position at 31 December 2024 was £30.5m (2023: £44.1m) and £27.9m at
31 March 2025, with the Group remaining debt free
*excludes any Yourgene revenue pre-acquisition (8 September 2023) and removes
IT-IS International revenue as per IFRS 5
Operational Highlights (including post year-end)
· Settled dispute with the DHSC and successfully reclaimed £12.2m in VAT from
HMRC
· Relocated all manufacturing to the Group's Manchester facility, using existing
capacity to establish a centre of operational excellence. Consolidation
project is expected to deliver c. £3.0m of annual EBITDA improvements, in
addition to £5.0m of acquisition synergy cost savings from the Yourgene
acquisition. This included the closure of IT-IS, two site moves and the
discontinuation of various real-time PCR instruments
· Received accreditation under the new EU requirements of the In Vitro
Diagnostic Regulation ("IVDR") for the Yourgene QST*R Base assay, as well as
for Yourgene Cystic Fibrosis Base, which is widely used for newborn screening
· Launched real-time PCR workflow for rapid onsite detection of norovirus in
oysters
· Supported Columbian customer in establishing a Non-Invasive Prenatal Testing
("NIPT") service laboratory in Colombia, which became operational in October
2024
· Completed disposal of Taiwanese laboratory business
· The Group has chosen to re-invest some of its cost savings into R&D to
accelerate the launch of new products, with an additional c. £2.0m being
invested in 2025
· Lyn Rees appointed Chief Executive Officer following a six-year tenure as CEO
of Yourgene Health plc
· Steve Gibson appointed Chief Financial Officer, and joined the Board along
with Dr Jo Mason, Chief Scientific Officer
· Dr John Brown, CBE, appointed Chairman of the Board, and Ian Gilham appointed
Non-Executive Director
· James Wakefield stepped down as Chairman, after 11 years of service, having
steered the Group through the pandemic and navigated a series of successful
acquisitions
Commenting on the results Lyn Rees, CEO of Novacyt, said: "I would like to
thank the team who have worked tirelessly to ensure the smooth operation of
joining two separate businesses together, along with the new leadership team
who have delivered considerable progress during 2024 focussing on the
reduction of operating costs and the completion of the Yourgene integration
project. The hard work executed has allowed us to deliver double digit revenue
growth in reproductive health and Ranger consumables, two key growth drivers
for the Group.
"Having commenced our site consolidation programmes, which are on track to
deliver c. £3.0m of annualised cost savings, we are now focused on investing
in our high priority growth areas. We are targeting the launch of four new
products in 2025, across Reproductive Health, Precision Medicine and Ranger
Technology, with an additional c. £2.0m of R&D investment expected in
this calendar year.
"We are confident that continued cost reductions, as well as expected growth
in revenues from existing and new products, will mean that our cash balance
will be sufficient to see the business through to EBITDA profitability."
Investor presentation
Lyn Rees, CEO, and Steve Gibson, CFO, will host an investor webinar
presentation relating to the Company's Final Results 2024 via the Investor
Meet Company platform today at 11am. Investors can sign up to Investor Meet
Company for free and register here
(https://www.investormeetcompany.com/novacyt-sa/register-investor) .
Contacts
Novacyt SA https://novacyt.com/investors (https://novacyt.com/investors/)
Lyn Rees, Chief Executive Officer Via Walbrook PR
Steve Gibson, Chief Financial Officer
SP Angel Corporate Finance LLP (Nominated Adviser and Broker) +44 (0)20 3470 0470
Matthew Johnson / Charlie Bouverat (Corporate Finance)
Vadim Alexandre / Rob Rees (Corporate Broking)
Deutsche Numis (Joint Broker) +44 (0)20 7260 1000
Freddie Barnfield / Duncan Monteith / Michael Palser
Allegra Finance (French Listing Sponsor) +33 (1) 42 22 10 10
r.durgetto@allegrafinance.com (mailto:r.durgetto@allegrafinance.com) /
Rémi Durgetto / Yannick Petit y.petit@allegrafinance.com
Walbrook PR (Financial PR & IR) +44 (0)20 7933 8780 or novacyt@walbrookpr.com
Paul McManus / Lianne Applegarth +44 (0)7980 541 893 / +44 (0)7584 391 303
Phillip Marriage / Alice Woodings +44 (0)7867 984 082 / +44 (0)7407 804 654
About Novacyt Group (www.novacyt.com)
Novacyt is an international molecular diagnostics company providing a broad
portfolio of integrated technologies and services, primarily focused on the
delivery of genomic medicine. The Company develops, manufactures, and
commercialises a range of molecular assays and instrumentation to deliver
workflows and services that enable seamless end-to-end solutions from sample
to result across multiple sectors including human health, animal health and
environmental.
The Company is divided into three business segments:
Clinical Broad portfolio of human clinical in vitro diagnostic products, workflows and
services focused on three therapeutic areas:
· Reproductive Health: NIPT, Cystic Fibrosis and other rapid aneuploidy
tests
· Precision Medicine: DPYD genotyping assay
· Infectious Diseases: Winterplex, multiplex winter respiratory PCR
panel
Instrumentation Portfolio of next generation size selection DNA sample preparation platforms
and rapid PCR machines, including:
· Ranger® Technology: automated DNA sample preparation and target
enrichment technology
· genesig q16 and q32 real-time quantitative PCR (qPCR) instruments
Research Use Only Range of services for the life sciences industry:
· Design, manufacture, and supply of high-performance qPCR assays and
workflows for use in human health, agriculture, veterinary and environmental,
to support global health organisations and the research industry
· Pharmaceutical research services: whole genome sequencing (WGS) /
whole exome sequencing (WES)
Novacyt is headquartered in Le Vésinet in France with offices in the UK
(Manchester), Singapore, the US and Canada and has a commercial presence in
over 65 countries. The Company is listed on the London Stock Exchange's AIM
market ("NCYT") and on the Paris Stock Exchange Euronext Growth ("ALNOV").
For more information, please refer to the website: www.novacyt.com
Chief Executive's review
2024 was a year of transition for Novacyt, as we continued to integrate
Yourgene into the wider Group and began working as one unified global
diagnostics business. Our focus in 2024 was to reduce our cost base and to
consolidate and rationalise our product and services offering. These
programmes are underway and on track to deliver the expected savings. We also
saw encouraging growth in key areas of our portfolio, and we believe we now
have a foundation from which we can deliver long-term, sustainable value for
shareholders.
Portfolio update
1) Clinical
The Clinical business, predominantly Yourgene Health branded, is focused
across three key strategic pillars: Reproductive Health, Precision Medicine
and Infectious Diseases, which each represent large and growing addressable
markets.
We have made significant progress during the year and post-period end in
progressing our clinical product portfolio through the new EU requirements of
the In Vitro Diagnostic Regulation ("IVDR"). We now have three clinical
products that are accredited under IVDR, after the Yourgene® Cystic Fibrosis
Base assay, a quantitative fluorescence PCR (QF-PCR) test used for newborn
screening as well as carrier screening in adults during family planning,
received accreditation in October 2024, followed by the QST*R Base Rapid
Aneuploidy Analysis assay in February 2025. Our regulatory team will continue
to progress our key products through the IVDR process to ensure that they can
be used in the clinical setting.
Reproductive Health
Over 2024, the Reproductive Health business grew by 26% on a proforma basis,
largely driven by the growth in the Group's cystic fibrosis portfolio in
Australia, following the introduction of a new nationwide reimbursement
pathway, enabling all eligible Australians to receive cystic fibrosis
screening prior to, or early in, pregnancy.
We have continued to strengthen our competitive position in the NIPT market
with a series of upgrades to the IONA Nx NIPT workflow, which now has the
capability to run twice the number of the samples in one run than previously
possible. In October 2024, we also held our IONA Nx NIPT User Meeting in Paris
which provided valuable customer insights to enable the development of future
NIPT roadmaps. We supported several of our new NIPT laboratory customers with
educational launch events to drive clinical awareness in their regions. We
were proud to see our first local installed NIPT service laboratory in
Colombia go live in October 2024. In addition, we have a new NIPT install lab
customer in Kazakhstan, the Presidential Clinic who hosted a prestigious
launch event for clinicians, and delegates from the Ministry of Health, in
November 2024.
Precision Medicine
During July 2024, the Association for Molecular Pathology (AMP) published
recommendations around the clinical implementation of pharmacogenomic
dihydropyrimidine dehydrogenase ("DPYD") genotyping assays, an assay which
helps identify cancer patients at risk of suffering a severe and potentially
life-threatening reaction to common chemotherapy. Working with key opinion
leaders around the world, our R&D team is currently developing an enhanced
version of our DPYD assay.
In November 2024, the Royal College of Pathologists in Australia (RCPA)
announced the need for DPYD testing to be introduced nationally and
reimbursed. Each year, over 17,000 Australians undergo this treatment and
around 30% of these patients develop grade 3-5 toxicity. Approximately 8% may
avoid serious toxicity through DPYD genotyping, and we are encouraged by this
recommendation by the RCPA that we believe could help many patients avoid
potentially life-threatening side effects arising from fluoropyrimidine-based
chemotherapy drugs.
Infectious diseases
The genesig™ Real-time PCR SARS-CoV-2 Winterplex had steady customer uptake
over the winter season in the UK, however management has decided to keep the
assay as an RUO assay rather than progressing through IVDR.
Genomic Services
Yourgene Genomic Services ("YGS") is now only located in Manchester, UK
following the disposal of the Taiwan service laboratory. The business is
equally split across research services for pharma, CRO and academia customers,
providing them with DNA extractions, whole genome sequencing, exome
sequencing, microarray and biobanking services.
The NIPT service expanded its offering with the post-period end launch in
February 2025 of the IONA Care +service, providing expectant parents with a
broader clinical menu including clinically relevant microdeletions. The
service lab team will launch a pan-cancer panel treatment selection test aimed
at clinical laboratories and clinical research centres in the coming months.
2) Instrumentation
Ranger® Technology ("Ranger"), the Group's automated DNA sample preparation
and target enrichment technology continues to be a focus and a key growth
driver for the Group. The platform enables lab customers to see improved
performance in DNA sequencing workflows across multiple applications
including NIPT, infectious disease testing, liquid biopsy, gene synthesis and
long read sequencing. The Group has a range of Ranger platforms serving
different customer segments and different sample throughputs, including the
LightBench, Yourgene® QS250 (embedded in our NIPT solutions) and NIMBUS
Select.
The Group's R&D team has been working hard on a new Ranger platform, set
to be launched later this year, that will be enable two workflows in one
instrument. Providing both fragment analysis and size selection, it will offer
a unique value proposition to long read sequencing research labs. The
instrument is currently with three customers sites finalising the beta
testing.
Despite a cautious instrumentation purchasing environment during the year, we
also saw healthy growth in Ranger consumables sales of 13% YoY, underlining
the strength and utility of our Ranger Technology.
In October 2024, we made the decision to close down our IT-IS International
Limited subsidiary, a real-time PCR instrument manufacturer, which has
improved the Group's EBITDA position by £1.0m annually. The MyGo PCR product
range has since been discontinued due to low demand in a saturated
marketplace, but we continue to support our customers with existing
instruments in the field with our Technical Support team. In addition, we
still have existing Original Equipment Manufacturer ("OEM") partnerships for
real-time PCR instruments which we maintain and support.
3) Research Use Only
Primer Design has continued to provide high quality research assays to the
life sciences industry worldwide focusing on applications in human health,
animal health, food, water and agriculture sectors. In June 2024, the Group
launched a real-time PCR workflow for rapid onsite detection of Norovirus in
oysters, addressing an unmet testing need within the oyster farming community,
which has seen steady adoption. In December 2024, we launched an mpox clade
differentiation assay for monitoring and surveillance of the mpox pandemic
which has been well received by our NGO customer base.
In November 2024, the Group expanded its veterinary and animal health
portfolio with the addition of two companion animal multiplex assays for the
rapid, accurate detection of six gastrointestinal disease-causing pathogens in
cats and dogs. The team launched a new Primer Design website
(http://www.primerdesign.co.uk) in February 2024 and is currently working on
an e-commerce shop for life sciences customers to place orders online,
expanding the Group's reach and supporting distributors with a focused sales
and marketing portal.
Site consolidations
By January 2025, the Group was in the process of completing changes to the
Company's operational footprint, including relocating all of the Company's
manufacturing to its Manchester facility. This meant transferring all
manufacturing facilities for the Company's Ranger® instrumentation and
consumables from Yourgene Health Canada's manufacturing site to Manchester,
relocating the Primer Design business from Southampton and closing its IT-IS
International Limited subsidiary. These consolidations have been a core focus
of the Group this year and by completing them, the Company has been able to
utilise existing capacity to establish a centre of operational excellence.
The Group remains on track to deliver an incremental £3.0m of annual EBITDA
improvements through the various site consolidation activities once concluded.
This is in addition to the £5.0m of acquisition synergy cost savings from the
Yourgene Health acquisition.
Board changes
In January 2024, the Group appointed Steve Gibson as Chief Financial Officer.
Steve joined Novacyt in 2017 and had served as Group Finance Director since
2020. His financial and operational expertise around the acquisition of
Yourgene Health were instrumental to the smooth delivery of the investment.
In May 2024, Lyn Rees and Jo Mason joined the Board as Chief Executive Officer
and Chief Scientific Officer respectively. Both were instrumental in the
seamless integration of Novacyt and Yourgene. Lyn's significant global
leadership, commercial expertise and proven track record of successfully
scaling companies has been invaluable to the Group. Jo, a leading molecular
biologist, has over 22 years of experience working in senior positions both in
industry and at prominent research institutes and has played a pivotal role in
the Company highlighting the technical benefits of the Company's offerings to
potential and existing customers.
The Group appointed Dr John Brown CBE as Chairman in September 2024, bringing
significant industry experience with him, including significant capital
markets and board experience in the healthcare and life sciences sector.
Finally, in October 2024, Dr Ian Gilham joined the Board as Non-Executive
Director (subject to ratification at the next AGM), bringing a wealth of
experience of working with public listed life sciences companies, with an
international track record in research, development and commercialisation of
diagnostic products.
Current trading and outlook
At the time of my appointment in May 2024, integrating Yourgene and reducing
the Group's cost base was our priority. We have since been able to
significantly reduce our operating costs through the rationalisation of our
sites and product portfolio, and the Group's operational footprint is now far
better positioned to deliver growth for shareholders, with all Group
manufacturing taking place from our Manchester facility. With all site
consolidations in progress and on target to deliver the previously announced
£3.0m in cost savings, Q1 2025 trading was in-line with management
expectations in terms of both revenues and an improved EBITDA performance with
a cash position at 31 March 2025 of £27.9m.
To deliver sustainable, long-term growth, we are now leveraging our strong
cash position to accelerate new product launches. As part of our strategic
review of the business, we have identified Reproductive Health, Precision
Medicine and Ranger® Technology as priority areas for investment. We expect
to invest an additional c. £2.0m into these areas in 2025 to help us deliver
four new product launches during the year.
Our cash position at 31 December 2024 was £30.5m (2023: £44.1m), and the
Group remains debt free. With continued cost savings, as well as our projected
revenue growth from existing and new products, the Board believes that the
Company's current cash balance is sufficient to reach breakeven and EBITDA
profitability. We plan to update the market in H2 on our future strategy.
Lyn Rees
Chief Executive Officer
29 April 2025
FINANCIAL REVIEW
Overview
2024 was a year of integration following the acquisition of Yourgene in
September 2023, which drove the year-on-year revenue growth of 85%.
Novacyt generated sales of £19.6m, an EBITDA loss of £9.1m and a loss after
tax of £42.4m.
Management took a number of actions to ensure the estimated acquisition cost
synergies of £5.0m were delivered, and significantly ahead of schedule. A
number of additional initiatives to further reduce the cost base of the
business have either completed or are in flight, which will improve the EBITDA
position of the Group, not all of which will be seen until the start of 2026.
On a proforma basis, costs have reduced from a circa £27.5m annual run rate
at the time of the acquisition, down to £21.1m in 2024, driven by the
delivery of acquisition cost synergies and the removal of IT-IS International
costs under IFRS 5.
Novacyt closed 2024 with £30.5m cash in the bank, which provides the Group
with a solid foundation on which to build its future strategy.
Business combinations
The acquisition of Yourgene was implemented by way of a UK scheme of
arrangement between Yourgene and its shareholders under Part 26 of the UK
Companies Act 2006.
IFRS 3 provides for a period of 12 months from acquisition to complete the
identification and measurement of the fair value of assets acquired and
liabilities assumed. Following the conclusion of this process, Goodwill has
now reduced from £19.5m to £12.1m (with other intangible assets increasing
to offset it, notably customer relationships) and is now subject to an annual
impairment review. Subsequently, as part of the annual impairment process,
goodwill was reduced to £0.6m.
Discontinued operations
During 2024, Novacyt commenced a strategic review of the business, which
included a review of the IT-IS International business. The outcome of the
review lead to the closure of IT-IS International as the PCR instrumentation
market had become saturated, and the business had experienced several
consecutive loss-making years.
In accordance with IFRS 5, the net result of the IT-IS International segment
has been reported in the line 'Loss from discontinued operations' on the
consolidated income statement for FY2023 and FY2024.
Profit & Loss:
Revenue
Statutory revenue grew by over 80% in 2024, to £19.6m, as a result of the
acquisition of Yourgene in September 2023.
At a business unit level, Primer Design delivered sales totalling £4.3m,
broadly flat year-on-year (excluding COVID sales). Yourgene delivered sales of
£15.3m.
On a proforma basis, excluding the impact of COVID-19, Group revenue declined
year-on-year by £1.3m, driven by two key factors; i) a reduction in
non-invasive prenatal testing (NIPT) services revenue following the Taiwan
divestment, circa £0.3m, and ii) a reduction in sequencing revenue from a key
customer, circa £1.0m.
There were differing levels of performance within the Group portfolio, with
reproductive health up 26% and Ranger® consumables up 13% year-on-year on a
proforma basis. Instrument sales were down year-on-year as a result of placing
a large number of instruments in 2023 in the APAC region, which was not
repeated to the same extent in 2024.
Gross profit
The business delivered a gross profit of £32.1m (163% margin), compared with
£3.5m (33% margin) in 2023. The margin, at 163%, is inflated as a result of
releasing the DHSC product warranty provision for £19.8m following the
dispute settlement. Removing the impact of this one-time entry, the underlying
gross profit grew to £12.3m, or 63%. The margin is back to the historic
levels delivered by the Group following a period of high stock write
offs/provisions that was not repeated in 2024.
Operating expenditure
Group operating costs increased by £25.8m to £41.1m in 2024, compared with
£15.3m in 2023, predominantly as a result of booking a £20.0m bad debt
write-off following the settlement with the DHSC. Removing the impact of this
one-time entry, the underlying opex cost would have been £21.1m. On a
proforma basis, 2024 opex costs are £6.4m lower than 2023, predominantly as a
result of the integration cost savings that have been delivered
post-acquisition and the removal of IT-IS International costs under IFRS
5.
Labour costs have increased year-on-year due to the inclusion of a full twelve
months of Yourgene staff costs compared to four months (8 September onwards)
in 2023, which have been partially offset by restructuring savings. The
Group's opening and closing headcount for 2024 was broadly flat at around 240.
However, the mix/quantity changed throughout the year driven by employee
departures, as part of the restructuring programmes, offset by the influx of
new, predominantly R&D, employees in Q4 2024 to help drive future organic
growth.
Non-labour costs follow a similar pattern in that the year-on-year increase is
due to the inclusion of a full twelve months of Yourgene costs compared to
four months (8 September onwards) in 2023.
EBITDA
The Group reported an EBITDA loss of £9.1m for 2024 compared with a loss of
£11.8m in 2023. The loss has decreased by £2.7m, driven by an increased
underlying gross profit contribution of £8.8m as a result of higher sales,
offset by a £5.8m increase in the underlying operating expenditure and a
£0.2m net EBITDA impact of the DHSC settlement.
Operating loss
The Group reported an operating loss of £37.3m compared with a 2023 loss of
£25.4m. Year-on-year, depreciation and amortisation charges have increased by
£3.7m, to £7.4m, mainly due to the inclusion of a full twelve months of
amortisation and depreciation charges on assets created as part of the
acquisition.
Net other operating expenses have increased from £9.9m to £20.9m. The main
items making up the 2024 charge are i) a goodwill impairment charge of £11.2m
in relation to the acquisition of Yourgene, following the completion of the
Purchase Price Allocation "PPA" process, ii) £7.3m of costs relating to the
DHSC dispute, including the £5.0m settlement fee, iii) £1.2m of costs
associated with site closures and restructuring fees (including redundancy
payments), and iv) £1.2m of other expenses including divestment costs
associated with the sale of the Yourgene Taiwan entity.
Loss after tax from continuing operations
The Group reported a loss after tax from continuing operations of £38.7m,
compared with a loss of £24.1m in 2023. Other financial income and expenses
netted to a loss of £2.1m compared with a £1.0m net income in 2023. The
three key items making up the balance are i) a £2.7m net financial foreign
exchange loss, mainly resulting from revaluations of bank and intercompany
accounts held in foreign currencies, ii) £1.4m interest income, mostly on
deposits held in bank accounts, and iii) £0.7m of interest charges on IFRS 16
liabilities. Taxation at £0.7m is predominantly a result of the movement in
deferred tax.
Loss from discontinued operations
In accordance with IFRS 5, the net result of the IT-IS International business
has been reported on a separate line "Loss from discontinued operations" in
the consolidated income statement for 2024 and 2023.
Earnings per share
2024 saw a loss per share of £0.59 compared to a loss per share of £0.40 in
2023.
Balance Sheet:
Non-current assets
Goodwill has decreased from £21.4m in 2023 to £2.7m in 2024. The decrease is
predominantly driven by the finalisation of the Yourgene acquisition
accounting, which resulted in a reduction in goodwill compared to the opening
value booked in the 2023 accounts and an impairment charge. The remaining
movement is due to exchange revaluations on the Primer Design goodwill
balance, which is not held in pound sterling.
Right-of-use assets have decreased from £11.0m at 31 December 2023 to £8.3m
at 31 December 2024, mainly as a result of the annual depreciation charges and
the disposal of the Taiwanese business that had a leased facility.
Property, plant and equipment has decreased by £1.8m from 31 December 2023 to
£2.4m at 31 December 2024, with the two main drivers being the annual
depreciation and the impact of selling the Taiwanese business.
Other non-current assets have increased by £7.3m to £17.6m as at 31 December
2024, driven by the finalisation of the Yourgene acquisition accounting, which
resulted in an increase to intangible assets, predominantly customer
relationships. These were partly offset by annual amortisation charges
totalling £3.4m.
Current assets
Inventories and work in progress has decreased year-on-year, closing 2024 at
£2.3m compared to £3.0m in 2023. The main driver for the reduction is
providing for or writing off all remaining IT-IS International stock following
the closure of the business.
Trade and other receivables has fallen by £31.3m to £4.7m at 31 December
2024, predominantly as a result of the DHSC settlement, whereby i) the
December 2020 unpaid invoice for £24.0m has been written off as it will no
longer be paid and ii) the successful reclaim of £12.2m of VAT (of which only
£8.2m was recognised at December 2023) on uncollectable DHSC sales invoices
as per the terms of the settlement agreement.
Tax receivables have fallen by £0.2m to £0.5m at 31 December 2024. The
current balance relates to Research and Development tax credits (SME Scheme)
accruals covering 2023 and 2024.
Other current assets have decreased to £1.5m, from £2.6m in 2023, with the
key driver being a reduction in the prepayment position at year end.
Prepayments at 31 December 2024 include the annual Group commercial insurance,
rent, rates and prepaid support costs.
Current liabilities
Short-term lease liabilities are broadly flat year-on-year at £1.3m compared
with £1.2m in 2023.
The short-term contingent consideration balance of £0.2m as at 31 December
2023 related to the acquisition of Coastal Genomics in Canada by Yourgene and
was subsequently paid in April 2024.
Trade and other liabilities decreased to £3.8m at 31 December 2024, from
£7.2m at 31 December 2023. At year end 2023 there were a number of high
value accruals and trade payables outstanding, e.g. legal fees for the DHSC,
which were not present at 31 December 2024.
Other provisions and short-term liabilities have fallen to £1.1m from £20.9m
at 31 December 2023 as a result of the DHSC settlement, whereby the product
warranty provision for £19.8m, made in relation to the dispute, has been
reversed.
Non-current liabilities
Deferred tax liabilities on temporary timing differences relate to the assets
acquired as part of the Yourgene acquisition in September 2023 and accelerated
capital allowances. Deferred tax liabilities have increased to £4.4m, from
£2.2m in 2023, as a result of the increase in intangible assets following the
completion of the acquisition accounting.
Lease liabilities long-term have decreased to £10.6m, from £12.5m, as a
result of rental payments made, and a £0.8m one-time impact from the disposal
of the Taiwanese entity since we no longer have the lease liability. The main
ongoing liabilities relate to two premises in the UK, Skelton House and City
Labs, that have multi-year leases.
Other provisions and long-term liabilities have decreased to £1.5m, from
£2.3m, predominantly as a result of the settlement of the Coastal Genomics
earnout milestone that totalled £0.7m at December 2023.
Cash flow
Cash held at the end of 2024 totalled £30.5m compared with £44.1m at 31
December 2023. Net cash used in operating activities was £9.8m for 2024, made
up of a working capital outflow of £0.7m and an EBITDA loss of £9.1m,
compared to a cash outflow of £25.0m in 2023.
Net cash used in investing activities decreased to £1.9m, from £13.9m in
2023. This is a result of Novacyt completing the all-cash acquisition of
Yourgene in 2023. This outflow was net of £1.1m interest income generated
from the Group's cash balances during 2024, down on the prior year as its cash
pile reduced.
Capital expenditure in 2024 totalled £1.9m compared with £0.7m in 2023.
Net cash used in financing activities decreased in 2024 to £1.8m compared
with £3.5m in 2023, with the main cash outflow being lease payments. 2023 saw
the repayment of the Yourgene SVB bank loan totalling £2.4m that did not
repeat in 2024.
The Group remains debt free at 31 December 2024.
Announcement Note
The information included in this announcement is extracted from the audited
Group Consolidated Accounts. Defined terms used in the announcement refer to
terms as defined in the Group Consolidated Accounts unless the context
otherwise requires. This announcement should be read in conjunction with, and
is not a substitute for, the full Group Consolidated Accounts.
Steve Gibson
Chief Financial Officer
Novacyt S.A.
Consolidated income statement for the years ended 31 December 2024 and 31
December 2023
Amounts in £'000 Notes Year ended Year ended
31 December
31 December
2024
2023 (*)
Continuing Operations
Revenue 19,630 10,621
Cost of sales 5 12,444 -7,130
Gross profit 32,074 3,491
Sales, marketing and distribution expenses -5,493 -3,593
Research and development expenses -2,767 -2,850
General and administrative expenses 6 -40,239 -12,709
Governmental subsidies - 154
Operating loss before other operating income/expense -16,425 -15,507
Other operating income 7 128 31
Other operating expenses 7 -21,046 -9,973
Operating loss after other operating income/expense -37,343 -25,449
Financial income 3,034 3,421
Financial expense -5,121 -2,436
Loss before tax -39,430 -24,464
Tax income 732 353
Loss after tax from continuing operations -38,698 -24,111
Loss from discontinued operations 15 -3,060 -4,181
Loss after tax attributable to owners of the Company (**) -41,758 -28,292
Loss per share (£) 8 -0.59 -0.40
Diluted loss per share (£) 8 -0.59 -0.40
Loss per share from continuing operations (£) 8 -0.55 -0.34
Diluted loss per share from continuing operations (£) 8 -0.55 -0.34
Loss per share from discontinued operations (£) 8 -0.04 -0.06
Diluted loss per share from discontinued operations (£) 8 -0.04 -0.06
* The 2023 consolidated income statement has been restated to reflect the
impact of the application of IFRS 5 relative to discontinued operations, by
stating the IT-IS International activity on a single line 'Loss from
discontinued operations'.
** There are no non-controlling interests.
Consolidated statement of comprehensive income for the years ended 31 December
2024 and 31 December 2023
Amounts in £'000 Notes Year ended Year ended
31 December
31 December
2024
2023 (*)
Loss for the period recognised in the income statement -41,758 -28,292
Items that may be subsequently reclassified to profit or loss:
Translation reserves 14 1,873 363
Total comprehensive loss -39,885 -27,929
Comprehensive loss attributable to owners of the Company (**) from:
Continuing operations -36,825 -23,748
Discontinued operations -3,060 -4,181
*The 2023 consolidated statement of comprehensive income has been restated to
reflect the impact of the application of IFRS 5 relative to discontinued
operations, by stating the IT-IS International activity on a single line 'Loss
from discontinued operations'.
**There are no non-controlling interests.
Statement of financial position as of 31 December 2024 and 31 December 2023
Amounts in £'000 Notes Year ended Year ended
31 December
31 December
2024
2023
Goodwill 9 2,669 21,446
Other intangible assets 17,575 10,232
Property, plant and equipment 2,407 4,183
Right-of-use assets 8,294 11,036
Non-current financial assets 25 57
Deferred tax assets 286 413
Total non-current assets 31,256 47,367
Inventories and work in progress 2,269 3,022
Trade and other receivables 10 4,717 36,034
Tax receivables 477 728
Prepayments and short-term deposits 1,452 2,601
Investments short-term 8 9
Cash and cash equivalents 30,453 44,054
Total current assets 39,376 86,448
Total assets 70,632 133,815
Lease liabilities short-term 11 1,257 1,209
Contingent consideration short-term - 193
Provisions short-term 12 748 19,988
Trade and other liabilities 13 3,767 7,183
Tax liabilities 47 65
Other current liabilities 401 927
Total current liabilities 6,220 29,565
Net current assets 33,156 56,883
Lease liabilities long-term 11 10,621 12,495
Contingent consideration long-term - 722
Provisions long-term 12 1,466 1,547
Deferred tax liabilities 4,445 2,241
Other long-term liabilities - 3
Total non-current liabilities 16,532 17,008
Total liabilities 22,752 46,573
Net assets 47,880 87,242
Statement of financial position as of 31 December 2024 and 31 December 2023
(continued)
Amounts in £'000 Notes Year ended Year ended
31 December
31 December
2024
2023
Share capital 14 4,053 4,053
Share premium account 50,671 50,671
Own shares -113 -138
Other reserves 14 3,810 1,599
Equity reserve 1,155 1,155
Retained earnings 14 -11,696 29,902
Total equity - owners of the Company 47,880 87,242
Total equity 47,880 87,242
Statement of changes in equity for the years ended 31 December 2024 and 31
December 2023
Amounts in £'000 Other Group reserves
Share capital Share premium Own shares Equity reserves Other Translation reserve OCI on retirement benefits Total Retained earnings Total equity
Balance at 1 January 2023 4,053 50,671 -91 1,155 -2,407 398 -8 -2,017 61,445 115,216
Translation differences - - - - - 363 - 363 - 363
Loss for the period - - - - - - - - -28,292 -28,292
Total comprehensive income / (loss) for the period - - - - - 363 - 363 -28,292 -27,929
Own shares acquired / sold in the period - - -47 - - - - - - -47
Other - - - - 3,253 - - 3,253 -3,251 2
Balance at 31 December 2023 4,053 50,671 -138 1,155 846 761 -8 1,599 29,902 87,242
Translation differences - - - - - 1,873 - 1,873 - 1,873
Loss for the period - - - - - - - - -41,758 -41,758
Total comprehensive loss for the period - - - - - 1,873 - 1,873 -41,758 -39,885
Own shares acquired / sold in the period - - 25 - - - - - - 25
Payment in shares - - - - 338 - - 338 - 338
Other - - - - - - - - 160 160
Balance at 31 December 2024 4,053 50,671 -113 1,155 1,184 2,634 -8 3,810 -11,696 47,880
The Other Group reserves in column 'Other' shows the reserve related to the
acquisition of Primer Design shares and the reserve for payment in shares. The
2023 movement of £3,253k is a result of the acquisition of Yourgene Health.
The 2024 movement of £338k is related to the Long-Term Incentive Plan (LTIP)
implemented in 2024.
Statement of cash flows for the years ended 31 December 2024 and 31 December
2023
Amounts in £'000 Notes Year ended Year ended
31 December
31 December
2024
2023 (*)
Net cash used in operating activities 17 -9,823 -25,446
Operating cash flows from discontinued operations -674 -3,069
Operating cash flows from continuing operations -9,149 -22,377
Investing activities
Acquisition / sale of subsidiary net of cash acquired -1,093 -15,429
Purchases of patents and trademarks -580 -154
Purchases of property, plant and equipment -1,281 -517
Sales of property, plant and equipment 22 26
Variation of deposits -67 116
Interest received 1,139 2,023
Net cash used in investing activities -1,860 -13,935
Investing cash flows from discontinued operations 15 96
Investing cash flows from continuing operations -1,875 -14,031
Financing activities
Repayment of lease liabilities -1,862 -1,110
Repayment of bank loans - -2,355
Purchase of own shares - net 25 -47
Net cash used in financing activities -1,837 -3,512
Financing cash flows from discontinued operations -91 -419
Financing cash flows from continuing operations -1,746 -3,093
Net decrease in cash and cash equivalents -13,520 -42,893
Cash and cash equivalents at beginning of year 44,054 86,973
Effect of foreign exchange rate changes -81 -26
Cash and cash equivalents at end of year 30,453 44,054
* The 2023 statement of cash flows has been restated to reflect the impact of
the application of IFRS 5 relative to discontinued operations, by stating the
IT-IS International activity under 'cash flows from discontinued
operations'.
Notes to the ANNUAL ACCOUNTS
1. Corporate Information
Novacyt is an international molecular diagnostics company providing a broad
portfolio of integrated technologies and services, primarily focused on the
delivery of genomic medicine. The Company develops, manufactures, and
commercialises a range of molecular assays and instrumentation to deliver
workflows and services that enable seamless end-to-end solutions from sample
to result across multiple sectors including human health, animal health and
environmental. Its registered office is located at 131 Boulevard Carnot, 78110
Le Vésinet.
2. BASIS OF ANNOUNCEMENT
2.1 Basis of Preparation
The financial information contained in this report comprises the consolidated
financial statements of the Company and its subsidiaries (hereinafter referred
to collectively as the "Group"). The figures in the tables are prepared and
presented in Great British Pounds ("GBP"), rounded to the nearest thousand
("£'000s").
2.2 Discontinued operations and assets held for sale
A discontinued operation is a component that either has been disposed of, or
is classified as held for sale, and
(a) represents a separate major line of business or geographical area of
operations,
(b) is part of a single co-ordinated plan to dispose of a separate major
line of business or geographical area of operations, or
(c) is a subsidiary acquired exclusively with a view to resale.
Discontinued operations are presented in the consolidated income statement as
a single amount comprising the total of:
- The post-tax profit or loss of the discontinued operation,
- The post-tax gain or loss recognised on the measurement to fair
value less costs to sell, and
- The post-tax gain or loss recognised on the disposal of assets or
the disposal group making up the discontinued operation.
Where material, the analysis of the single amount is presented in the relevant
note (see note 15).
In the statement of cash flows the net cash flow attributable to the
operating, investing and financing activities of discontinued operations have
been disclosed separately.
No adjustments have been made in the statement of financial position.
Comparatives for discontinued operations are restated.
2.3 Going concern
The Directors have, at the time of approving the financial statements, a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Thus, they adopt the going
concern basis of accounting in preparing the financial statements after having
taken into account the available information they have for the future, and
especially the cash forecast prepared for the next 12 months.
In preparing this cash forecast, the Directors have considered the following
assumptions:
- A positive cash balance at 31 December 2024 of £30,453k;
- The business plan for the next 12 months;
- The working capital requirements of the business;
- No additional external funding has been forecast.
As such, the forecast prepared by the Group shows that it is able to cover its
cash needs during the financial year 2025 up until April 2026.
Business combinations
Business combinations are accounted for using the purchase method (see
IFRS 3).
Each time it acquires a company or group of companies constituting a business,
the Group identifies and measures the assets acquired and liabilities assumed,
most of which are carried at fair value. The difference between the fair value
of the consideration transferred, including the recognised amount of any
non-controlling interest in the acquiree, and the net amount recognised in
respect of the identifiable assets acquired and liabilities assumed measured
at fair value, is recognised as goodwill.
Pursuant to IFRS 3, the Group applies the following principles:
- Transaction costs are recognised immediately as operating expenses
when incurred;
- Any purchase price adjustment of an asset or a liability assumed is
estimated at fair value at the acquisition date, and the initial assessment
may only subsequently be adjusted against goodwill in the event of new
information related to facts and circumstances existing at the acquisition
date if this assessment occurs within the 12-month allocation period after the
acquisition date. Any adjustment of the financial liability recognised in
respect of an additional price subsequent to the intervening period or not
meeting these criteria is recognised in the Group's comprehensive income;
- Any negative goodwill arising on acquisition is immediately
recognised as income; and
- For step acquisitions, the achievement of control triggers the
remeasurement at fair value of the interest previously held by the Group in
profit or loss. Loss of control results in the remeasurement of the possible
residual interest at fair value in the same way.
For companies acquired during the year, only the results for the period
following the acquisition date are included in the consolidated income
statement. For the financial year 2023, this applies to Yourgene Health Ltd
(formerly PLC) and its subsidiaries, which were acquired on 8 September 2023.
Critical accounting judgements and key sources of estimate uncertainty
In the application of the Group's accounting policies, the Directors are
required to make judgements (other than those involving estimations) that have
a significant impact on the amounts recognised and to make estimates and
assumptions about the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
2.5.1 Critical accounting judgements
· Trade and other receivables
An estimate of the risks of non-receipt based on commercial information,
current economic trends and the solvency of individual customers is made to
determine the need for impairment on a customer-by-customer basis. Management
use significant judgement in determining whether a credit loss provision is
required.
At the year end, the Group had trade receivables of £3,540k against which a
credit loss provision of £302k has been applied.
2.5.2 Key sources of estimation uncertainty
· Measurement of goodwill
Goodwill is tested for impairment on an annual basis. The recoverable amount
of goodwill is determined mainly on the basis of forecasts of future cash
flows. The total amount of anticipated cash flows reflects Management's best
estimate of the future benefits and liabilities expected for the relevant CGU.
The assumptions used and the resulting estimates sometimes cover very long
periods, taking into account the technological, commercial and contractual
constraints associated with each CGU. These estimates are mainly subject to
assumptions in terms of volumes, selling prices and related production costs,
and the exchange rates of the currencies in which sales and purchases are
denominated. They are also subject to the discount rate used for each CGU.
The value of the goodwill is tested whenever there are indications of
impairment and reviewed at each annual closing date or more frequently should
this be justified by internal or external events.
The carrying amount of goodwill in the statement of financial position and
related impairment loss over the period is shown below:
Amounts in £'000 Year ended Year ended
31 December
31 December
2024
2023
Goodwill Primer Design 5,979 6,255
Cumulative impairment of goodwill -3,922 -4,103
Net value 2,057 2,152
Goodwill IT-IS International 9,437 9,437
Cumulative impairment of goodwill -9,437 -9,437
Net value - -
Goodwill Yourgene Health (*) 11,852 19,294
Cumulative impairment of goodwill -11,240 -
Net value 612 19,294
Total goodwill 2,669 21,446
(*) See notes 9 and 16
3. Main event of the Period - department of health and social care 'dhsc'
settlement impact
During 2021, the Group received notification of a contract dispute between its
subsidiary, Primer Design Ltd, and the DHSC. The total amount of revenue in
dispute was £130,642k (£156,770k including VAT) in respect of performance
obligations satisfied in 2020.
As a result, an invoice for a total of £19,964k (£23,957k including VAT) in
respect of products delivered in 2020 was outstanding and its recovery was
contingent on the outcome of the dispute. A product warranty provision
totalling £19,753k was also booked in 2020.
In 2021, additional invoices totalling £49,034k (including VAT) were included
in the dispute. In accordance with IFRS 15 "Revenue from Contracts with
Customers", this amount was reversed from revenue. No bad debt provision was
recognised.
On 25 April 2022, legal proceedings were issued against Novacyt and Primer
Design Ltd and on 30 January 2023, the UK High Court directed Novacyt that the
hearing of the case had been listed to commence on 10 June 2024.
On 11 June 2024, the Group reached a settlement with the DHSC on terms that
the Group pays £5,000K to the DHSC.
Consequently, from an income statement perspective, the transactions resulted
in a net loss of circa £5,000k:
i) The December 2020 outstanding DHSC invoice for £19,964k
(excluding £3,993k VAT) was written off as a bad debt (see note 6 'General
and administrative expenses' and note 10 'Trade and other receivables').
ii) The product warranty provision for £19,753k was reversed
and the unutilised allowance was released to cost of sales in the income
statement (see note 5 'Cost of sales' and note 12 'Provisions').
iii) The settlement fee of £5,000k (gross) is shown in other
operating expenses.
From a cash flow perspective:
i) The Group paid £5,000k inclusive of all taxes, to the
DHSC in July 2024 (visible in other operating expenses in the income statement
and in "Net cash used in operating activities" in the statement of cash
flows).
ii) The Group was able to reclaim circa £12,200k VAT paid to
HMRC relating to the uncollectible DHSC invoices, and the cash was received in
late 2024 (visible in note 10 'Trade and other receivables' and in "Net cash
used in operating activities" in the statement of cash flows).
Legal and professional fees incurred in defending the claim along with product
storage costs are shown in note 7 'Other operating income and expenses'.
4. Operating segments
Segment reporting
Pursuant to IFRS 8, an operating segment is a component of an entity:
- that engages in business activities from which it may earn revenues
and incur expenses (including revenues and expenses relating to transactions
with other components of the same entity);
- whose operating results are regularly reviewed by the Group's Chief
Executive to make decisions regarding the allocation of resources to the
segment and to assess its performance; and
- for which discrete financial information is available.
The Group has identified three operating segments, whose performance and
resources are monitored separately. Following the Group's decision to
discontinue the IT-IS International business in 2024, it has been treated as a
discontinued operation for 2024 and the 2023 comparative period.
o Yourgene Health
This segment represents the activities of Yourgene Health and its
subsidiaries, a genomics technology and services business, focussed on
delivering molecular diagnostic and screening solutions, across reproductive
health and precision medicine, based throughout the world but with its
headquarters in Manchester, UK.
o Primer Design
This segment represents the activities of Primer Design Ltd, which is a
designer, manufacturer and marketer of molecular 'real-time' qPCR testing
devices and reagents in the area of infectious diseases based in Eastleigh,
UK. The operations of the business were moved to Manchester in early 2025.
o IT-IS International
This segment represents the activities of IT-IS International Ltd, a
diagnostic instrument development and manufacturing company that specialised
in the development of PCR devices for the life sciences and food testing
industry, that was based in Stokesley, UK. As this business ceased trading in
late 2024, this segment is being treated as a discontinued operation.
The Group's central/corporate costs that are not allocated to individual
operating segments are shown below under Corporate. Where appropriate, costs
are recharged to individual operating segments via a management recharge
process.
Intercompany eliminations represent intercompany transactions across the Group
that have not been allocated to an individual operating segment. It is not a
discrete segment.
The Chief Operating Decision Maker is the Chief Executive Officer.
Headcount
The average headcount by segment is presented in the table below:
Segment 2024 2023
Yourgene Health 148 149
Primer Design 48 74
IT-IS International 19 24
Corporate 19 23
Total headcount 234 270
The reduction in Primer Design and IT-IS International headcount reflects the
impact of redundancy programmes on the businesses.
Breakdown of revenue by operating segment and geographic area
o Year ended 31 December 2024
Amounts in £'000 Primer Design Yourgene Health Total
Geographical area
United Kingdom 1,102 3,326 4,428
France 333 2,214 2,547
Europe (excluding UK and France) 699 2,879 3,578
America 772 1,906 2,678
Asia-Pacific 851 4,269 5,120
Middle East 235 523 758
Africa 354 167 521
Total revenue 4,346 15,284 19,630
o Year ended 31 December 2023
Amounts in £'000 Primer Design Yourgene Health Total
Geographical area
United Kingdom 1,415 1,919 3,334
France 268 743 1,011
Europe (excluding UK and France) 628 815 1,443
America 1,076 418 1,494
Asia-Pacific 1,029 1,449 2,478
Middle East 211 222 433
Africa 360 68 428
Total revenue 4,987 5,634 10,621
Breakdown of result by operating segment
o Year ended 31 December 2024
Amounts in £'000 Primer Design Yourgene Corporate Intercompany Total
Health
eliminations
Revenue 4,346 15,284 - - 19,630
Cost of sales 19,030 -6,634 - 48 12,444
Sales and marketing costs -1,150 -4,035 -317 9 -5,493
Research and development -745 -1,759 -263 - -2,767
General and administrative -22,665 -9,783 -390 -43 -32,881
Earnings before interest, tax, -1,184 -6,927 -970 14 -9,067
depreciation and amortisation
as per management reporting
Depreciation and amortisation -7,358
Operating loss before other operating income/expense -16,425
Other operating income 128
Other operating expenses -21,046
Operating loss after other operating income/expense -37,343
Financial income 3,034
Financial expense -5,121
Loss before tax -39,430
Year ended 31 December 2023
Amounts in £'000 Primer Design Yourgene Corporate Intercompany Total
Health
eliminations
Revenue 4,987 5,634 - - 10,621
Cost of sales -3,978 -3,282 - 130 -7,130
Sales and marketing costs -2,447 -1,105 -41 - -3,593
Research and development -1,846 -1,004 - - -2,850
General and administrative -6,030 -2,254 -716 27 -8,973
Governmental subsidies 154 - - - 154
Earnings before interest, tax, -9,160 -2,011 -757 157 -11,771
depreciation and amortisation
as per management reporting
Depreciation and amortisation -3,736
Operating loss before other operating income/expense -15,507
Other operating income 31
Other operating expenses -9,973
Operating loss after other operating income/expense -25,449
Financial income 3,421
Financial expenses -2,436
Loss before tax -24,464
Assets and liabilities are not reported to the Chief Operating Decision Maker
on a segmental basis and are therefore not disclosed.
In accordance with IFRS 5, the results of the IT-IS International segment for
2024 and 2023 have been reported on a separate line 'Loss from discontinued
operations' in the consolidated income statement, which is shown below loss
before tax and thus is not reported in the table above.
Breakdown of non-current assets by geographical area
The tables below exclude financial instruments and deferred tax assets.
o Year ended 31 December 2024
Amounts in £'000 United Kingdom Rest of Europe America Asia-Pacific Total
Goodwill 2,669 - - - 2,669
Other intangible assets 15,666 - 1,909 - 17,575
Property, plant and equipment 2,004 300 88 15 2,407
Right-of-use assets 7,940 255 72 27 8,294
Total 28,279 555 2,069 42 30,945
o Year ended 31 December 2023
Amounts in £'000 United Kingdom Rest of Europe America Asia-Pacific Total
Goodwill 9,674 4,604 6,964 204 21,446
Other intangible assets 5,585 1,285 3,358 4 10,232
Property, plant and equipment 2,948 268 514 453 4,183
Right-of-use assets 9,392 348 351 945 11,036
Total 27,599 6,505 11,187 1,606 46,897
5. Cost of sales
Amounts in £'000 Year ended Year ended
31 December
31 December
2024
2023
Cost of inventories recognised as an expense 11,390 6,686
Change in stock provision -5,790 -989
Freight costs 24 41
Direct labour 1,535 1,363
Product warranty -19,738 -
Other 135 29
Total cost of sales -12,444 7,130
Cost of sales is a credit balance as a result of releasing the DHSC related
product warranty provision for £19,753K, following the settlement.
In 2024, the stock provision has decreased by a net £5,790k (2023: decreased
by £989k). Stock, which had previously been provided for, has been written
off and disposed of during 2024 following the DHSC settlement (see note 3),
with the cost being charged to 'Cost of inventories recognised as an expense'
and a corresponding release of the stock provision being made.
6. General and administrative expenses
Amounts in £'000 Year ended Year ended
31 December
31 December
2024
2023
Purchases of non-stored raw materials and supplies 583 301
Lease and similar payments 284 336
Maintenance and repairs 931 443
Insurance premiums 786 741
Legal and professional fees 1,811 1,707
Banking services 61 48
Employee compensation and social security contributions 6,552 4,196
Depreciation and amortisation of property, plant and equipment and intangible 7,358 3,737
assets
DHSC bad debt write off 19,964 -
Management fees revenue to discontinued activities -296 -673
Other general and administrative expenses 2,205 1,873
Total general and administrative expenses 40,239 12,709
The main driver for the year-on-year increase in general and administrative
expenses relates to the bad debt write off of £19,964k in relation to the
DHSC December 2020 invoice that, as per the terms of the settlement agreement
in June 2024, will not be paid.
Labour costs have increased year-on-year due to the inclusion of a full twelve
months of Yourgene staff costs compared to four months (8 September onwards)
in 2023, which have been partially offset by restructuring savings.
Depreciation and amortisation of property, plant and equipment and intangible
assets increased in 2024 due to the inclusion of a full twelve months of
Yourgene charges compared to four months (8 September onwards) in 2023.
Legal and professional fees include advisors' fees, audit fees and legal fees.
Other general and administrative expenses include building rates, regulatory
fees, loss on disposal of fixed assets and IT expenses.
7. Other operating income and expenses
Amounts in £'000 Year ended Year ended
31 December 2024
31 December 2023
Other operating income 128 31
Total other operating income 128 31
Impairment of Yourgene Health goodwill -11,240 -
Impairment of Primer Design goodwill - -4,113
DHSC contract dispute costs -7,273 -1,862
Restructuring expenses -1,242 -1,593
Acquisition related expenses -67 -1,705
Loss on disposal of Taiwan subsidiaries -861 -349
Other expenses -363 -351
Total other operating expenses -21,046 -9,973
Operating expenses
Following the conclusion of the purchase price allocation process, the
goodwill balance attributable to the acquisition of Yourgene was impaired by
£11,240k as part of the annual impairment review process.
DHSC contract dispute costs relate to legal and professional fees and product
storage costs incurred in the resolution of the commercial dispute. The
settlement figure of £5,000k agreed with the DHSC is included within this
category.
Restructuring expenses in 2024 relate to Group-wide restructuring charges, as
the Group continues to reduce its cost base.
2023 acquisition related expenses were associated with the acquisition of
Yourgene Health plc.
8. Loss per share
The loss per share is calculated based on the weighted average number of
shares outstanding during the period. The diluted loss per share is calculated
based on the weighted average number of shares outstanding and the number of
shares issuable as a result of the conversion of dilutive financial
instruments. At 31 December 2024 there are no outstanding dilutive
instruments.
Amounts in £'000 Year ended Year ended
31 December
31 December
2024
2023
Net loss attributable to owners of the Company -41,758 -28,292
Impact of dilutive instruments - -
Net diluted loss attributable to owners of the Company -41,758 -28,292
Weighted average number of shares (actual amount) 70,626,248 70,626,248
Impact of dilutive instruments - -
Weighted average number of diluted shares 70,626,248 70,626,248
Loss per share (£) -0.59 -0.40
Diluted loss per share (£) -0.59 -0.40
Loss per share from continuing operations (£) -0.55 -0.34
Diluted loss per share from continuing operations (£) -0.55 -0.34
Loss per share from discontinued operations (£) -0.04 -0.06
Diluted loss per share from discontinued operations (£) -0.04 -0.06
9. Goodwill
Goodwill is the difference recognised, upon consolidation of a company,
between the fair value of the purchase price of its shares and the net assets
acquired and liabilities assumed, measured in accordance with IFRS 3.
Cost £'000
At 1 January 2023 31,502
Acquisition of the Yourgene Health Group of companies (*) 19,542
Disposal of Cambridge Genomics Corporation and Yourgene Biosciences Co. Ltd -276
Exchange differences -419
At 31 December 2023 50,349
Adjustment to the Yourgene Health goodwill resulting from the completion of -7,475
the purchase price allocation process (*)
Exchange differences -919
At 31 December 2024 41,955
Accumulated impairment losses
At 1 January 2023 -24,856
Impairment of the Primer Design goodwill -4,113
Impairment of the IT-IS International goodwill -262
Exchange differences 328
At 31 December 2023 -28,903
Impairment of the Yourgene Health goodwill -11,240
Exchange differences 857
At 31 December 2024 -39,286
Carrying value
At 31 December 2023 21,446
At 31 December 2024 2,669
(*) See additional information in note 16
Primer Design
The impairment testing of the CGU as at 31 December 2024 was carried out using
the DCF method, with the key assumptions as follows:
o Five-year business plan;
o Extrapolation of cash flows beyond five years based on a growth rate of
1.5%; and
o Discount rate corresponding to the expected rate of return on the market for
a similar investment, regardless of funding sources, equal to 15.1%.
The implementation of this approach demonstrated that the value in use
amounted to £6,323k, which is higher than the carrying amount of all the
operating assets in the CGU. As such, no impairment charge was recognised in
the year ended 31 December 2024.
Yourgene Health
The impairment testing of the CGU as at 31 December 2024 was carried out using
the DCF method, with the key assumptions as follows:
o Five-year business plan;
o Extrapolation of cash flows beyond five years based on a growth rate of
0.75%; and
o Discount rate corresponding to the expected rate of return on the market for
a similar investment, regardless of funding sources, equal to 15.2%.
The implementation of this approach demonstrated that the value in use
amounted to £23,935k, which is lower than the carrying amount of all the
operating assets in the CGU. As such, an impairment charge of £11,240k was
recognised in the year ended 31 December 2024.
10. Trade and other receivables
Amounts in £'000 Year ended Year ended
31 December
31 December
2024
2023
Trade and other receivables 3,540 27,509
Expected credit loss provision -302 -223
Tax receivables - Value Added Tax 1,004 8,541
Other receivables 475 207
Total trade and other receivables 4,717 36,034
Trade and other receivables has fallen since December 2023 predominantly as a
result of the DHSC settlement, whereby the December 2020 unpaid invoice for
£23,957k has been written off as it will no longer be paid, as per the terms
of the settlement agreement.
The 'Tax receivables - Value Added Tax' balance has reduced following the
successful reclaim of VAT paid in the UK on sales invoices that will no longer
be paid by the DHSC, as per the terms of the settlement agreement.
Trade receivables balances are due within one year. Once an invoice is more
than 90 days overdue, it is deemed more likely to default and as such, these
invoices have been provided for in full as part of an expected credit loss
model, except where Management have reviewed and judged otherwise.
The movement in the expected credit loss provision is shown below:
Year ended Year ended
31 December
31 December
2024
2023
Amounts in £'000
Balance at the beginning of the period 223 214
Impairment losses recognised 569 260
Amounts written off during the year as uncollectible -11 -98
Impairment losses derecognised -40 -120
Amounts recovered during the year -446 -36
Impact of foreign exchange 7 3
Balance at the end of the period 302 223
The split by maturity of the clients' receivables is presented below:
Year ended Year ended
31 December
31 December
2024
2023
Amounts in £'000
2,848 2,579
Less than one month
Between one and three months 389 575
Between three months and one year 278 75
More than one year 25 24,280
Balance at the end of the period 3,540 27,509
11. Lease liabilities
The following tables show lease liabilities carried at amortised cost.
o Maturities
Amounts in £'000 Year ended Year ended
31 December
31 December
2024
2023
Lease liabilities - Less than 1 year 1,257 1,209
Lease liabilities - Between 1 and 5 years 3,011 4,664
Lease liabilities - More than 5 years 7,610 7,831
Total lease liabilities 11,878 13,704
o Change in lease liabilities in 2024 and 2023
Amounts in £'000 Opening Business combinations Repayment Non-cash movements Sale of businesses Closing
Changes in 2023 872 13,283 -1,110 659 - 13,704
Changes in 2024 13,704 - -1,862 787 -751 11,878
The main liabilities relate to Skelton House and City Labs, two premises in
Manchester, UK, that have multi-year leases.
12. Provisions
The table below shows the nature of and changes in provisions for risks and
charges for the period from 1 January 2024 to 31 December 2024:
Amounts in £'000 At Increases Reversals Reclass Sales of businesses Impact of foreign exchange
1 January
2024 At 31 December
2024
Provision for retirement benefits 7 - - - - - 7
Provisions for restoration of premises 1,540 84 -20 -92 -45 -8 1,459
Provisions long-term 1,547 84 -20 -92 -45 -8 1,466
Provisions for restoration of premises 36 141 -36 92 - - 233
Provisions for litigation 157 500 -157 - - - 500
Provisions for product warranty 19,795 15 -19,795 - - - 15
Provisions short-term 19,988 656 -19,988 92 - - 748
The table below shows the nature of and changes in provisions for risks and
charges for the period from 1 January 2023 to 31 December 2023:
Amounts in £'000 At Business Combinations Increases Reversals Impact of foreign exchange At
1 January
2023 31 December
2023
Provision for retirement benefits - 7 - - - 7
Provisions for restoration of premises 95 1,407 51 -15 2 1,540
Provisions long-term 95 1,414 51 -15 2 1,547
Provisions for restoration of premises 330 - - -294 - 36
Provision for litigation 157 - - - - 157
Provisions for product warranty 19,813 - - -18 - 19,795
Provisions short-term 20,300 - - -312 - 19,988
Provisions short-term have fallen since December 2023 predominantly as a
result of the DHSC settlement, whereby the product warranty provision made in
relation to the dispute, totalling £19,753k, has been reversed.
Provisions chiefly cover:
- Risks related to litigations;
- The restoration expenses of the premises as per the lease
agreements; and
- Product assurance warranties.
The provisions for the restoration of premises are an estimation of amounts
payable to cover dilapidations at the end of the rental periods, thus at the
following dates:
- Primer Design Ltd: November 2025;
- IT-IS International Ltd: December 2025;
- Yourgene Health: January 2026, August 2026, January 2028, September
2029, and February 2037 as there are multiple sites that do not have
co-terminus leases.
13. Trade and other liabilities
Amounts in £'000 Year ended Year ended
31 December
31 December
2024
2023
Trade payables 462 2,311
Accrued invoices 2,433 3,585
Payroll related liabilities 665 1,114
Tax liabilities - Value Added Tax 195 159
Other liabilities 12 14
Total trade and other liabilities 3,767 7,183
At 31 December 2023, there were a number of high value accruals/trade payables
outstanding, such as legal fees associated with defending the DHSC dispute,
which are not present at December 2024.
14. ISSUED CAPITAL AND RESERVES
14.1 Share capital
As of 31 December 2024 and 2023, the Company's share capital of
€4,708,416.54 was divided into 70,626,248 shares with a par value of 1/15th
of a Euro each.
The Company's share capital consists of one class of share. All outstanding
shares have been subscribed, called and paid.
Amount of share capital Amount of share capital €'000 Unit value per share Number of shares
£'000 € issued
Balance at 1 January 2023 4,053 4,708 0.07 70,626,248
Balance at 31 December 2023 4,053 4,708 0.07 70,626,248
Balance at 31 December 2024 4,053 4,708 0.07 70,626,248
14.2 Other reserves
Amounts in £'000
Balance at 1 January 2023 -2,017
Transfer reserve payment in shares from "retained earnings" 3,253
Translation differences 363
Balance at 31 December 2023 1,599
Reserve payment in shares from "retained earnings" 338
Translation differences 1,873
Balance at 31 December 2024 3,810
14.3 Retained earnings/losses
Amounts in £'000
Balance at 1 January 2023 61,445
Loss for the year -28,292
Transfer reserve payment in shares to "other reserves" -3,253
Other 2
Balance at 31 December 2023 29,902
Loss for the year -41,758
Other 160
Balance at 31 December 2024 -11,696
15. Discontinued operations
During 2024, Novacyt commenced a strategic review of the business, which
included a review of the IT-IS International business. The outcome of the
review resulted in the closure of IT-IS International as the PCR
instrumentation market had become saturated, and the business had experienced
several consecutive loss-making years.
In accordance with IFRS 5, the net result of the IT-IS International segment
has been reported in the line 'Loss from discontinued operations' on the
consolidated income statement.
The table below presents the detail of the loss generated by the business as
of 31 December 2024 and 2023:
Amounts in £'000 Year ended Year ended
31 December
31 December
Discontinued Operations
2024
2023
Revenue 546 958
Cost of sales -862 -719
Gross profit -316 239
Sales, marketing and distribution expenses -181 -357
Research and development expenses -309 -378
General and administrative expenses -1,333 -1,815
Governmental subsidies 5 -29
Operating loss before other operating income/expense -2,134 -2,340
Other operating income - -
Other operating expenses -805 -1,755
Operating loss after other operating income/expense -2,939 -4,095
Financial income 116 219
Financial expense -237 -720
Loss before tax -3,060 -4,596
Taxation (expense) / income - 415
Loss after tax from discontinued operations -3,060 -4,181
16. Business Combinations
Acquisition of Yourgene Health Ltd (formerly PLC)
On 8 September 2023, Novacyt UK Holdings Limited, a wholly-owned subsidiary of
Novacyt SA, completed the purchase of the entire share capital of Yourgene
Health Ltd (formerly PLC), an international molecular diagnostic group. The
acquisition was implemented by way of a UK scheme of arrangement between
Yourgene Health and its shareholders under Part 26 of the UK Companies Act
2006.
The acquisition combines highly complementary technologies and services, with
the enlarged Group able to leverage mutual research and development
capabilities for ongoing product development and portfolio enhancement to
improve the customer offering.
The purchase price was £16,670k, and was settled in full in cash.
IFRS 3 provides for a period of twelve months from acquisition to complete the
measurement of the fair value of assets acquired and liabilities assumed.
Following completion of this activity, the main amendment is that there has
been a change in the split of the intangible assets (reported preliminary fair
value of £10,618k) and goodwill (reported preliminary fair value of
£19,542k). The adjustments during the measurement period have been reflected
in the current period and not retrospectively applied.
As a result, the fair value of the assets acquired and the liabilities assumed
are now as follows:
Intangible assets £21,000k
Property, plant and equipment £2,844k
Right-of-use assets £10,980k
Inventory £2,542k
Trade receivables £2,473k
Other current assets £4,237k
Cash £1,289k
Lease liabilities -£13,283k
Bank borrowings -£2,355k
Contingent liabilities -£1,020k
Deferred tax liabilities -£4,898k
Trade payables and accruals -£13,353k
Other current liabilities -£5,913k
Fair value of assets acquired and liabilities assumed £4,542k
Goodwill £12,128k
The table above shows how the goodwill figure of £12,128k is arrived at after
allocating the purchase price across all the assets and liabilities acquired.
The subsequent sale of the Taiwanese entities reduced this initial goodwill
amount by £276k to £11,852k. The residual goodwill arising from the
acquisition reflects the future growth expected to be driven by new and
existing customers, the value of the workforce, patents and know-how.
Goodwill is a residual component calculated as the difference between the
purchase price for the acquisition of control and the fair value of the assets
acquired and liabilities assumed. It includes unrecognised assets such as the
value of the personnel and know-how of the acquiree.
The total amount of goodwill that is expected to be deductible for tax
purposes is nil.
17. Notes to the cash flow statement
Amounts in £'000 Year ended Year ended
31 December
31 December
2024
2023
Loss for the year -41,758 -28,292
Loss from discontinued operations -3,060 -4,181
Loss from continuing operations -38,698 -24,111
Adjustments for:
Depreciation, amortisation, impairment loss and provisions -202 9,643
Unwinding of discount 84 31
Losses on disposal of assets 681 1,195
Charges related to payment in shares (LTIP) 338 -
Other revenues and charges without cash impact 697 270
Income tax charge / (credit) -732 -893
Operating cash flows before movements of working capital -40,892 -18,046
Decrease in inventories (*) 660 2,554
Decrease in receivables 32,383 3,769
Decrease in payables -1,209 -12,680
Cash used in operations -9,058 -24,403
Income taxes received 373 980
Finance costs -1,138 -2,023
Net cash used in operating activities -9,823 -25,446
Operating cash flows from discontinued operations -674 -3,069
Operating cash flows from continuing operations -9,149 -22,377
(*) The variation of the inventories value results from the following
movements:
Amounts in £'000 Year ended Year ended
31 December
31 December
2024
2023
Decrease in the gross value of inventories 6,045 3,351
Variation of the stock provision -5,385 -797
Total variation of the net value of inventories 660 2,554
18. Related parties
Parties related to Novacyt SA are:
- the managers, whose compensation is disclosed below; and
- the Directors of Novacyt SA.
Remuneration of key management personnel
Amounts in £'000 Year ended Year ended
31 December
31 December
2024
2023
Fixed compensation and company cars 1,264 1,176
Variable compensation 160 57
Social security contributions 147 158
Contributions to supplementary pension plans 57 33
Cash based payment benefits - LTIP 15 -
Total remuneration 1,643 1,424
Aggregate Directors' remuneration
Amounts in £'000 Year ended Year ended
31 December
31 December
2024
2023
Fixed compensation and company cars 962 726
Variable compensation 90 -
Social security contributions 140 115
Contributions to supplementary pension plans 28 4
Total remuneration 1,220 845
Other related party transactions
Yourgene Health invoiced £48k (excluding VAT) in 2024 for goods and services
to MyHealthChecked plc, a company for which Lyn Rees is a non-executive
Director.
19. Subsequent events
There are no material subsequent events to report.
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