The acquisition by a cash shell of a former-East German diagnostics business raised a few eyebrows last year but EKF Diagnostics, as the company is now known, has built an impressive portfolio of installed medical testing instruments that now number 40,000 around the world. Moreover, these latest half-year results showed the benefit of the new management, with sales in some of EKF's key markets up by almost 20 per cent in only a year, although heavy investment in capacity meant an operating loss of £1.4m.
EKF had to update its German operation and the combination of better sales and marketing and a €1m (£0.86m) investment in the production base that can now produce four times as many instruments meant EKF Germany increased turnover by 18 per cent to £5.9m. The other notable performance was at the company's Quotient diagnostic division, where sales doubled to £470,000.
Chief executive Julian Baines said the company will now challenge the likes of Axis-Shield and Siemens with a simplified testing device for developing markets. He also said that EKF is now fully self-funded through its German business and that no extra equity would need to be raised this year. However, he noted that the company would be going back to the market for acquisitions.
Broker Collins Stewart forecasts a full-year loss of 1.64p per share.
EKF DIAGNOSTICS (EKF) | ||||
---|---|---|---|---|
ORD PRICE: | 25.5p | MARKET VALUE: | £64.1m | |
TOUCH: | 25-26p | 12-MONTH HIGH: | 33p | LOW: 18p |
DIVIDEND YIELD: | nil | PE RATIO: | na | |
NET ASSET VALUE: | 14p* | NET CASH: | £3.3m |
Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2010 | nil | -0.30 | -0.72 | nil |
2011 | 7.38 | -1.55 | -0.89 | nil |
% change | +14 | - | - | - |
*Includes intangible assets of £34.2m, or 14p a share |