By Samuel Indyk
Investing.com – Shares in Novacyt (LON:NCYT) were trading lower on Tuesday morning after the company provided a trading update and outlook for the year ahead.
The AIM-listed company said FY21 underlying revenue was £95.8 million, excluding the £40.8 million of revenue under dispute with the Department of Health and Social Care (DHSC), versus management guidance of approximately £100 million. Revenue derived from COVID-19 products accounted for 86% in FY2021, compared to 95% in FY20.
FY21 EBITDA before exceptional items is expected to be above £36.0 million, which would give a margin above 37.5%. The company’s cash position at 31st December was £101.8 million.
“In 2021, we delivered a financial performance in line with expectations, excluding our ongoing dispute with the DHSC,” Novacyt CEO David Allmond said. “This highlighted the agility of the Company to rapidly respond to the changing marketplace for our products, with a noticeable increase in demand from the private market for COVID-19 testing in travel, sport, film, media, and workplace settings.”
For 2022, the company has warned that it expects COVID-19 reported sales could be reduced by around 50% in 2022 versus 2021, although this will be partially offset by new non-COVID-19 products which are due to come onstream in Q4 2022.
The diagnostics company added that eight of its products remain under review following the implementation of the UK Health Security Agency’s Medical Devices CTDA regulations. So far, the company has received approval for one product and have had two added to the temporary protocol.
Dispute with the DHSC
Novacyt confirmed it is still in dispute with the DHSC in relation to a supply contract entered into in Q4 2020. The company said it continues to engage with the DHSC to resolve the dispute and continues to believe it has strong grounds to assert its contractual rights.
At 08:12GMT, shares in Novacyt were trading lower by 6.2% at 225.55 pence per share.