Collagen Solutions PLC – Half-year Report

Collagen Solutions plc (AIM: COS), the developer and manufacturer of biomaterials and regenerative medicines for the enhancement and extension of human life, announces its unaudited results for the six months ended 30 September 2019.

 

Operational Highlights

· Revenue growth of 14.4%

· Four new customer contracts secured (H1 2018: nine) and began supply to 10 new customers (H1 2018: 16) with increased average value of new customer contracts vs prior years

· Core supply business growth of 56% driven by tissue sales, which more than doubled with 124% growth, and collagen, which grew at 13%

· Development and contract manufacturing project work continues to increase with multiple ongoing projects, whilst revenue in this category declined 17% during the period this reflects timing of development contract milestones only

· Delivered on key development projects with development and contract manufacturing revenue accounting for 42% of overall revenue in H1 2019 (H1 2018: 57%)

· Initiated an infrastructure capacity expansion project at our Glasgow facility to support increased demand

· Secured investigational medical product (IMP) licence from MHRA to support manufacturing for a development customer moving into phase 1 clinical trial scheduled for 2020

· Made continued progress on the path to CE mark approval on ChondroMimetic® although the regulatory environment in Europe remains challenging and we remain cautious on timing for approval

 

Financial Highlights

· Group revenue grew 14.4% to £2.23m (H1 2018 £1.95m)

· Gross margin reduced to 71.2% (H1 2018: 73.0%) driven by business mix

· LBITDA of £0.67m (H1 2018: £0.66m)

· Pre-tax loss of £1.19m (H1 2018: £1.06m) with post tax losses of £0.98m (H1 2018: £1.05m)

· Cash and cash equivalents of £5.01m (31 March 2019: £1.68m)

· Fundraise: on 5 June 2019 the Company completed a fundraise of £5.96m gross of costs made up of a strategic investment by Rosen’s Diversified Inc of £4.18m, a placing with existing and new investors of £1.25m and an open offer totalling £0.53m.

· Norgine Ventures Bond repayments of £0.59m reducing overall debt to £1.94m (H1 2018: £2.48m)

· Other income £0.09m (2018: £0.15m) reflecting timing of grant funding

· Tax credits of £0.2m (H1 2018: Nil)

 

Jamal Rushdy, Chief Executive Officer of Collagen Solutions, commented: “As we previously announced, we are pleased to report the third consecutive six-month period of double-digit sales growth. We have shown particularly strong growth from our tissue business and also are continuing to bring on new customers and contracts from our global sales team. Our product development teams remain focused on development projects for customers, providing a solid platform for future contract manufacturing business. Finally, we are investing in our manufacturing capacity to ensure we can continue to support future growth and we look forward to a successful remainder of the year.”