Lab services firm’s growth to be impacted by Covid travel rule changes
SourceBio International, the Nottingham-based laboratory services firm, says it remains confident in its full year growth despite the changes to international travel rules and Covid-19 testing requirements.
The group’s Covid-19 RT PCR testing throughput has increased since the first half of the year, with average daily testing volumes in July approaching 7,000 which is more than double the rate in the first half, average testing in August exceeding 10,000 per day and average testing in September to date at approximately 14,000 per day.
The firm says a “significant proportion” of its PCR testing volumes and revenues are currently derived from Day 2, Day 8 and “Fit to Fly” testing. Day 2 and Day 8 testing will be removed under the new travel rules from the end of October for fully vaccinated individuals and low-risk countries. The requirements surrounding PCR testing for out-bound travel, the “Fit to Fly” scheme, and D2 and D8 from red list countries do not appear to be impacted and the board expects that these newly-announced changes to international travel will likely encourage more people to travel abroad from the UK, and that this should contribute to a rise in “Fit to Fly” out-bound testing volumes.
SourceBio says it anticipates that a “material proportion” of travel related demand will switch from PCR technology to lateral flow technology. with this in mind, the company has evaluated a number of lateral flow technologies and has signed two commercial distribution agreements for the ongoing supply of lateral flow tests. The first agreement is with Excalibur Healthcare Services for the supply of their new Lateral Flow Test, the Excalibur Rapid SARS-COV-2 Antigen Test. This test kit is approved for professional use in Europe and the UK, and has demonstrated close to 100% specificity and 100% sensitivity for high viral loads (equivalent to positive PCR values below Ct=28). The Excalibur test kit may also be combined with a “Test to go” scanning app and Travel Pack that has been proven to provide a more accurate reading of results than the human eye. The second agreement is with Everything Genetic Limited which also offers a home use option for lateral flow antigen testing.
A statement from SourceBio said: “The board continues to respond to a fast-moving COVID-19 testing market place in order to maximise business potential. As announced in July, first half revenues more than tripled to £37m compared to prior year, with approximately 75% of these revenues derived from COVID-19 testing. Adjusted EBITDA of £11.2m was significantly above the £1.7m recorded in the first half of the prior year. Full year revenues and adjusted EBITDA are still expected to show dramatic growth compared to the previous year, however the changes to travel PCR testing are expected to impact on the level of this expected material growth.
“The company is evaluating the full year 2021 and 2022 and will provide a full trading update as part of its interim results statement which is scheduled to be released on 28 September 2021.”
