Shares in point-of-care business EKF Diagnostics (EKF:AIM) gained 5.5% to 74.9p after the company confirmed that strong trading since the start of the year had continued into the second quarter of 2021, in line with prior upgraded expectations.
This reflects improved trading in the core business which provides blood analysers and consumables for testing patients with diabetes and anaemia, and ‘ongoing strong demand’ for its contract manufacturing services for Covid-19 sample collection devices.
The company’s unique collection kit deactivates all viruses, bacteria, fungi and mycobacterium tuberculosis allowing safe sample handling and transport, greatly reducing risk of infection.
Revenues for the six months through June were 46.5% ahead of the prior year reaching £38.56 million while EBITDA (earnings before interest, taxes, depreciation, and amortisation) is expected to be in the region of £12.75 million, up 43% year-on-year.
Full year consensus earnings estimates have increased by 39% since the start of the year according to data provided by Stockopedia.
The company confirmed its intention to maintain a modest but progressive dividend policy, proposing to pay 1.1p per share on 1 December 2021 to shareholders on the register at 4 November.
GROWTH BEYOND COVID
EKF said it was confident that its growth strategy can generate double-digit growth in EBITDA over the next three-to-four years, aside from Covid-related revenues.
Growth would be achieved by investing in the core business to realise ‘strong’ organic growth as well as seeking complementary and targeted earnings enhancing acquisitions.
In addition, EKF is looking to maximise value from its agreement with Mount Sinai Innovation Partners which allows the company ‘advanced access’ to innovative commercial opportunities.
Mount Sinai is one of the largest integrated healthcare systems in the US, caring for diabetics and patients of African ancestry, the two major population groups most affected by kidney disease and dialysis.