The transformation of Tissue Regenix (TRX) from development vehicle into commercial company has come at a cost to the bottom line. Spending may have dropped in the major wound care segment - where the company repurposes animal and human tissue by removing DNA and other cellular matter - but increased expenditure in sales and marketing caused operating losses to widen to £11.1m in the reported period, from £10.2m in the prior period.
In the US, this expenditure is proving beneficial. In the reported period, the group signed three more agreements with Group Purchasing Organisations (GPO), which are responsible for ordering medical products for use in hospitals. This included the two largest GPOs in the US, meaning three-quarters of the hospital beds served by these organisations now have access to Tissue Regenix products. Management expects wound care revenue to accelerate in 2017.
Progress has been slower in the orthopaedics and cardiac divisions. A setback in the regulatory approval of tendon implant product OrthoPure XT has hurt sentiment and the shares have fallen a third so far in 2017. But management still expects to launch OrthoPure in Europe by the end of the year. Prior to these results, analysts at Hardman had therefore forecast sales to rocket to £5.6m in the year to December 2017, but pre-tax losses are also expected to widen to £14m.
TISSUE REGENIX (TRX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 14p | MARKET VALUE: | £109m | |
| TOUCH: | 14-14.5p | 12-MONTH HIGH / LOW: | 14p | 21p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 1.5p | NET CASH: | £8.2m | |
| Year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 0.05 | -4.0 | -0.55 | nil |
| 2014 | 0.01 | -6.3 | -0.88 | nil |
| 2015 | 0.10 | -8.2 | -1.19 | nil |
| 2016 | 0.82 | -10.0 | -1.27 | nil |
| 11 months to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 1.44 | -10.9 | -1.29 | nil |
| % change | +77 | - | - | - |
Ex-div: na Payment: na | ||||
