City round-up: Yourgene Health; Franchise Brands; Studio Retail Group; Regional REIT; Softcat
Yourgene Health, the Manchester biotech group, said its half year period to September 30, has seen strong revenue growth and a positive adjusted EBITDA performance.
Unaudited results reveal £17.5m turnover, more than double the £8.2m recorded for the same period last year and ahead of previous guidance of at least £15.0m.
Genomic Services revenues were up 260% to £10.5m driven by COVID-19 testing, while Genomic Technologies revenues rose 32% to £6.9m.
A positive adjusted EBITDA of approximately £2m is expected to be reported when unaudited half year results are published around mid-December. This compares with a loss of £0.2m last year
Unaudited revenues in fiscal year 2022, to date, already represent 96% of total 2021 revenues of £18.3m, with the full year top line performance now expected to exceed consensus expectations.
However, the group says the exact scale of out-performance remains difficult to judge at this stage in the financial year. With travel corridors now open for business travel the company said it remains confident in the continued recovery of non-COVID revenue streams to underpin previously stated longer-term forecasts.
Chief executive, Lyn Rees, said: “These results demonstrate the breadth and depth of the integrated service offering that Yourgene has created to support its increasingly global customer base.
“I am very proud of the hard work that has driven a strong improvement in performance and created a more diverse platform for future growth. Yourgene is now a truly global genomic services and technologies business working in partnership with world leaders in DNA technology to develop and commercialise high quality diagnostic solutions.
“Performing a significant role in the response to the COVID-19 pandemic has also enabled us to expand our capabilities rapidly, not just to capture the current opportunity, but with a very clear focus on our longer term progress.
“The growth in non-COVID services demonstrates the advantage of having multiple capabilities to deploy flexibly according to our clients’ needs and in rapidly changing market conditions. Having invested significantly in our capabilities and business development last year, we look forward with confidence for the rest of this year and at the broader growth prospects ahead.”
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Stephen Hemsley
Franchise Brands, the Macclesfield-based multi-brand franchise business, said it has continued to perform strongly, in a third quarter trading update to September 30, today, with adjusted EBITDA for the quarter and year-to-date reaching a record level.
This strong performance has been driven by the outstanding growth of its Metro Rod franchisees, who have increased system sales for the quarter by 32% year-on-year.
Willow Pumps has been slower to recover from the reduced COVID-related volumes of 2020, particularly in the supply and installation part of the business which is reliant on the house-building sector.
The B2C division continues to perform well with 52 new recruits year-to-date, which is ahead of 2020 and in line with 2019. The board is, therefore, confident of meeting current consensus market expectations for the year to 31 December 2021 – £58.2m revenue, £8.4m adjusted EBITDA, 5.43p EPS, 1.50p dividend – which had been upgraded in July, and reconfirms the group’s strategic financial target of run-rate turnover of £100m and adjusted EBITDA of £15m by the end of 2023.
The digital transformation at Metro Rod and Metro Plumb continues at pace, the company said. Its integrated technology platform, the core elements of which are the ‘Vision’ works management system and the ‘Connect’ customer portal, is being optimised with a series of upgrades to further enhance functionality.
The group said it continues to seek opportunities to utilise its considerable balance sheet strength to complement its organic growth through earnings-enhancing acquisitions that will either expand or enhance the B2B division, leverage existing B2C infrastructure, or identify a franchise business of scale that would create a third division of the group.
Executive chairman, Stephen Hemsley, said: “I am pleased with our Q3 performance which demonstrates the strength of our organic strategy and look forward to Q4 and the full year result with confidence.
“The progress we are making with our digital platform is already beginning to transform our existing businesses and will provide a scaleable technology platform to support the accelerated development of businesses we will acquire in the future. We will, therefore, continue to invest significant resources in this area.”
He added: “We continue to review a number of acquisition opportunities but remain patient and will only move forward where we are confident that an opportunity will provide a good return for our shareholders, in a reasonable timescale, and with an acceptable risk.”
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Paul Kendrick
Accrington-based Studio Retail Group, the digital value retailer, said first half product sales were marginally ahead of the exceptional performance seen in the previous year, and up 38% over a two year period.
In a trading update for the six months to September 24, it said its financial services revenue in the period was 11% ahead of the prior year.
As has been well publicised, global shipping container availability and costs have been materially disrupted in recent months. The business, headed by CEO Paul Kendrick, took a conscious decision early in the summer to secure its supply chain for the crucial trading period leading up to Christmas, aided by Studio’s in-house sourcing office based in Shanghai.
This included use of its contracted container shipping, plus additional charter ships, which gives more guaranteed stock availability. This means that, overall, Studio is in a strong stock position ahead of the peak with inventory levels approximately 10% ahead of last year.
However, a small number of ranges have experienced delays which could impact availability late into the peak season.
The group’s core net debt ended September at approximately £20.6m (September 2020: £45.2m), with the strong half two trading from last year and the proceeds from the sale of Education being offset by the growth in receivables and the extra investment in stock.
Studio typically delivers around 40% of its full year product sales during the upcoming third quarter period that includes Black Friday and Christmas. While the business is well positioned with a strong overall stock position, there are continuing headwinds in the wider market that make the outlook more uncertain than usual at this stage of the year, it said.
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Stephen Inglis
Salford property group Regional REIT reported a rent collection update for the third quarter, today, which showed that, as at October 21, the company had collected 91.3% of the rent due. This comprised rent received of 87.5%, monthly rents of 2.1% and agreed collection plans of 1.7%.
As at October 21, 2021, the 93.6% of rent received year to date compares favourably with the equivalent period in 2020 of 91.7%.
The company said it remains in supportive and ongoing discussions with tenants regarding the remainder of the outstanding rent, and expects to collect the vast majority of it in due course.
Stephen Inglis, CEO of London & Scottish Property Investment Management, the asset manager of Regional REIT, said: “We are very encouraged by the high level of rent collections.
“In line with our expectations total year to date rents received amount to 96.2% of rents invoiced, with Q3 2021 collections already amounting to 91.3%. We anticipate collecting the vast majority of the outstanding balance in due course.”
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Listed IT infrastructure technology and services provider, Softcat, has reported another year of strong organic growth, profitability and cash generation in its preliminary results for the 12 months to 31 July 2021.
Revenues in the period rose by 7.4% to £1,156.7m (2020: £1,077.1m) with the business making a pre-tax profit of £118,967 (2020: £93,617).
Gross profits were £276,358 (2020: £235,705) and a strong balance sheet position was maintained with net cash at year end of £101.7m (2020: £80.1m).
Softcat, which has offices in Leeds, Manchester, Birmingham and London, says the new financial year has started well.
It anticipates that the resumption of business travel and events will create a significant headwind during 2022.
The company continues to target double-digit gross profit growth, well ahead of market trend, and it expects full year operating profit for 2022 to be in line with the record achieved in 2021.
Graeme Watt, Softcat CEO, said: “Public sector demand remained strong throughout the period and we saw further recovery in the corporate sector with an acceleration in customer growth and order volumes as the year progressed.
“As previously reported, the first half of the year was particularly strong as we delivered a small number of exceptionally large value mid-market deals.
“We made excellent progress selling deeper into existing customers and saw gross profit per customer improve by 14.6%, while also increasing the size of the customer base by 2.3%.
“Both people and systems continue to be a focus for investment, and we ended the year with 1,681 employees, an increase of 10%. We are very well positioned to drive growth and remain focused on taking further share in a growing market.
“Cash generation has remained typically robust and I’m delighted the company is able to recommend the payment of a special dividend.”
