04 April 2018
Collagen Solutions Plc (AIM: COS), the developer and manufacturer of biomaterials for the enhancement and extension of human life today announces a trading update for the year ended 31 March 2018.
Due to a delay in contractual discussions with a new customer the Board announces its trading update today. The agreement not being concluded by the end of the year has materially impacted revenues and as a consequence the Company will not meet its current revenue expectations. This delay, combined with other customer product delays which were disclosed at the time of the interim results, will mean that revenue for the year to 31 March will be £3.5m. (2017: £3.9m).
The loss for the year will be greater than anticipated due to the lower expected revenue and the costs and write-downs associated with the proposed restructuring of the New Zealand operations, which was announced last week. Such losses will in part be offset by the partial reversal of previously accrued earn-out provisions.
Group cash balances at the year-end were approximately £5.0 million (2017: £9m).
Jamal Rushdy, CEO commenting on the announcement said: "While we have experienced protracted sales cycles across several parts of our business, the size and general nature of those contracts under negotiation is promising. Consequently, we continue to take steps to strengthen the commercial team, address the gaps in execution and focus our resources in the areas of greatest opportunity to more efficiently convert opportunities in our core business. Together with the recently announced measures aimed at rationalising the Company's cost structure, we now aim to be cash flow positive in the final quarter of the current financial year"
David Evans, Chairman, commenting on the announcement said: "It is clearly disappointing to have not hit our revised revenue targets for the year. Whilst the year ahead will be challenging given the previously flagged over-stocking situation with one of our Korean customers we will shortly announce key hires aimed at strengthening our commercial operations. Our backlog of commercial discussions remains healthy and the aim remains to build upon the size and nature of the contracts we secured in the second-half of the year.
I remain heavily personally committed to ensuring the success of Collagen Solutions and I look forward to providing a further update when we announce our preliminary results in July."
|Collagen Solutions Plc
Jamal Rushdy, Chief Executive Officer
Hilary Spence, Chief Financial Officer
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|Cenkos Securities plc (Nominated Adviser and Broker)
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About Collagen Solutions:
Collagen Solutions Plc is a global supplier, developer, and manufacturer of medical grade collagen, tissues, and related medical devices and components for use in regenerative medicine, medical devices and in-vitro diagnostics and research. The Company is also expanding its range of biomaterials-based finished medical devices based on its internal and acquired intellectual property for commercialisation with partners via licensing and distribution arrangements, including ChondroMimetic®. The Company's products are used in a wide variety of applications including orthopaedics, cardiovascular, dental, plastic surgery, wound healing, neurology and urology.
For more information go to: www.collagensolutions.com.