04 December 2018

Half Yearly Report
Interim Results for the six months ended 30 September 2018

Delivering on our growth strategy

Collagen Solutions plc (AIM: COS), the developer and manufacturer of biomaterials and regenerative medicines for the enhancement and extension of human life, announces results for the six months ended 30 September 2018.

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Operational Highlights

  • Nine new customer contracts secured (H1 2017: eight) and began supply to sixteen new customers (H1 2017: eight)
  • New distribution agreements for ChondroMimetic® in Europe and Asia.
  • Two new distribution partners in China
  • New Zealand restructuring and manufacturing consolidation into Glasgow substantially completed
  • Proprietary products on track to deliver against plans. ChondroMimetic® CE Mark final data submission to be completed this month
  • New Tissue business unit established, tissue product line extended and four new tissue customers secured (included within the sixteen new customers referred to above)
  • Delivered on key development projects with our customers accounting for 50% of our revenue in H1 2018 (H1 2017: 8%)

Financial Highlights

  • Group revenue and other income grew 13% to £2.10m (H1 2017: £1.86m); adjusted for the previously disclosed expiration of a contract with a Korean customer the balance of our business grew at 55%
  • Gross margin 73% (H1 2017: 64%)
  • LBITDA of £0.66m (H1 2017: £0.96m or £1.23m once adjusted for separately identifiable items - see Note 4 in accounts)
  • Pre-tax loss of £1.06m (H1 2017: £1.38m or £1.64m once adjusted for separately identifiable items - see Note 4 in accounts)  
  • Cash and cash equivalents of £2.56m (31 March 2018: £5.02m)
  • Cash used in operations £0.67m (H1 2017: £1.54m)
  • Full settlement of earn-outs on acquisition of £0.56m for Collagen Solutions NZ Limited and Collagen Solutions LLC
  • Post period end, variation of the Bond Subscription Agreement with Norgine Ventures providing for a six-month principal repayment holiday

Jamal Rushdy, CEO of Collagen Solutions, commented: "We remain on track to meet our key initiatives for the year including achieving our commercial execution plans and financial performance objectives in line with market expectations. Commercialisation of our proprietary products remains a key focus. Our planned rolling submission of data to support our goal of obtaining the CE Mark for ChondroMimetic® this financial year continues and we have successfully concluded agreements with new European and Asian distributors. Discussions continue with several more with the aim of completing these ahead of the limited user release planned to follow the ChondroMimetic® CE Mark.

"Financially, we are performing well. The variation of the Bond Subscription Agreement with Norgine Ventures will allow us greater flexibility to exploit growth opportunities for future years.

"Operationally, our New Zealand restructuring initiative is delivering the expected synergies and benefits and the New Zealand team has delivered four new customers in the first half. Finally, we will continue to deliver more visibility and metrics to our investors relating to the value and progress within our core business."

 

Enquiries:

Collagen Solutions Plc
Jamal Rushdy, CEO
Hilary Spence, CFO
Via Walbrook
Cenkos Securities plc (Nominated Adviser and Broker)
Steve Cox (Corporate Finance)
Stephen Keys
Tel: 0207 397 8900
Walbrook PR Ltd Tel: 020 7933 8780 or collagen@walbrookpr.com
Anna Dunphy Mob: 07876 741 001
Helen Cresswell Mob: 07841 917 679