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Tissue Regenix can still break even in 2020

The regenerative medical specialist is busy integrating its US acquisition, and still hopes to break even in 2020
September 3, 2018

Having tapped the market for an extra £40m via a share placing this time last year, investors could easily have been concerned to see just £12m left on the balance sheet at Tissue Regenix (TRX). But hefty investment – $26m (£20m) of which went into the purchase of US group CellRight – seems to have paid off. In the first six months of 2018, the group reported a fourfold increase in revenue – thanks largely to a £3.2m contribution from CellRight – while gross margins rose by a whopping 12.1 percentage points to 56 per cent.

IC TIP: Buy at 9.4p

That’s not to downplay the performance of the group's original chronic wound product DermaPure, though, which grew sales by nearly three-quarters – or 96 per cent in constant currency – to £1.5m. In fact, manufacturing of DermaPure in the US has already been moved over to the CellRight factory, and a new distribution agreement signed with ARMS medical for the product in that region. An inaugural distribution agreement for the newly enlarged group has also been signed on home turf with Pennine Healthcare.

Analysts at Trinity Delta expect sales to roughly double between 2017 and 2018 to £10.8m, which should keep losses fairly stable, around £9.7m and -0.77p a share.

TISSUE REGENIX (TRX)   
ORD PRICE:9.4pMARKET VALUE:£110m
TOUCH:9-9.75p12-MONTH HIGH:13pLOW: 5.6p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:3p*NET CASH:£12.2m
Half-year to 30 JuneTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20171.3-5.4-0.6nil
20185.6-4.8-0.4nil
% change+315-11-37-
Ex-div:na   
Payment:na   
*Includes intangible assets of £19.5m, or 1.7p a share