City briefs: Avacta; EMIS; Animalcare; ITM Power; Gear4Music; and ECSC

Wetherby-based life sciences business Avacta Group has announced a trading update for the 17 month period ended 31 December 2019.

Revenues for the period, which include an initial milestone payment from LG Chem, have grown 100% to £5.5m from £2.76m (12 months ended 31 July 2018) and are ahead of market expectations.

Avacta notes revenues from its Affimer® diagnostics business have grown by 130% as more customer evaluations of the Affimer® platform are underway. And it says the Group’s order intake and sales pipeline into 2020 are the strongest to date.

The cash position at 31 December 2019 was £8.7m (31 July 2018: £5.2m), also ahead of market forecasts.

The listed Group intends to announce its audited results for the 17 months ended 31 December 2019 in late March 2020.

Dr Alastair Smith, chief executive of Avacta, said: “We are delighted with the significant commercial and operational progress that has been made during the period, expanding our therapeutic development partnership with LG Chem and adding new collaborations with ADC Therapeutics and with Daewoong.

“Our diagnostics business has continued to gain traction and is poised for continued growth in 2020 which should ultimately lead to license revenues.

 “We are also due to take our first drug AVA6000, a re-engineered form of the chemotherapy Doxorubicin into the clinic in the middle of 2020, making it a ground-breaking year for the Group. 

“AVA6000 has been modified with Avacta’s pre|CISION technology to reduce the side effects without affecting the efficacy of this effective cancer treatment.”

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Listed Leeds-based healthcare software and systems business EMIS has reported a strong balance sheet today, with net cash of £31.1m as at 31 December 2019 (31 December 2018: £15.6m).

In its update for the year ended 31 December 2019, the company says trading was in line with Board expectations, with growth in both revenue and adjusted operating profit maintained at similar levels to the half year. 

In EMIS Health, the Group’s leading NHS market shares were maintained, and the GP IT Futures English GP Framework renewal process was concluded, as previously announced on 21 October 2019.

The Group continues to invest in the development of its next generation EMIS-X software platform.

It has also completed its reorganisation in the second half of the year, while undertaking further productivity and process improvements.

EMIS intends to announce its results for the year ended 31 December 2019 on 18 March 2020.

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Animal health business Animalcare Group has said its revenue for the year to 31 December 2019 was £71.1m (2018: £72.5m) a decline of 1.5% (c1.0% at constant exchange rate).  

While new product launches accounted for £1.8m additional sales at the York-based group, revenue was hit by previously reported supply challenges by £1.7m and the decline in use of antibiotics in production animals of £1m.

Earnings were in line with market expectations, with a net debt reduction of over 30% year on year.

Four new products were launched over 2019 – Cortacare, Butazocare, Doxycare and Metrocare. And Animalcare signed a distribution agreement for Procanicare, the first product to be launched across all of the Group’s seven territories.

Animalcare’s chief executive officer, Jenny Winter, said: “We have made strong progress over the last twelve months delivering our five-pillar strategy alongside the continued drive towards greater integration, simplification and efficiency.

“This is reflected in our improving cash position and strengthening financial measures, despite the impact of the external manufacturing and supply issues we faced throughout 2019.”

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Listed energy storage and clean fuel company, ITM Power, has confirmed the incorporation of ITM Linde Electrolysis GmbH, a joint venture between ITM Power and Linde as announced in October.

ITM Linde will focus on providing global green gas solutions using ITM Power’s modular PEM electrolysis technology and Linde’s EPC expertise.

Andreas Rupieper, head of group R&D and portfolio management at Linde, will be appointed managing director of ITM Linde.

Before Joining Linde as vice president – head of business unit petrochemistry, Rupieper worked as a senior consultant for Management Engineers, now part of PWC Strategy and before that for 13 years at Thyssenkrupp, most recently as project director, EPC.

Graham Cooley, CEO of ITM Power, said: “I am delighted that Andreas has been confirmed as MD of the newly incorporated joint venture, demonstrating the collaboration with Linde has proceeded as expected and reached this next stage of development.

“I look forward to working closely with Andreas as we open new markets and customer opportunities.”

Rupieper added: “Hydrogen is a key facilitator in the energy transition and has significant market potential.

“Joining forces with ITM Power, a leading OEM for electrolysis-based hydrogen production systems enables a joint market offering to serve our customers with the best-in-class solution for their specific requirements.”

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Gross profit for York-based musical instruments and equipment business Gear4music increased by £1.2m (18%) from £6.8m to £8m.

The listed company has released its trading update for the two months to 31 December 2019, noting profits for the 2020 financial year are expected to be at least in line with Board expectations

Gear4music’s chief executive officer, Andrew Wass, said: “I am very pleased to report a successful FY20 peak trading period, that reflects the commercial and operational progress we have made across the business during the last calendar year.

“Our primary FY20 objective has been to improve our operational strength and efficiency, gross margins and profitability relative to quickly growing market share during FY19.

“Our upgraded infrastructure demonstrated its resilience and capacity over the Black Friday to Cyber Monday weekend, and we comfortably dispatched over 26,000 consignments, which was 34% more than last year’s Black Friday weekend.

“We remain confident in the medium to long term growth opportunity, whilst continuing our focus on improving gross margins and sustainable profitability.”

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Cyber security provider ECSC, which is based in Bradford, has seen revenue growth of 10% to about £5.9m.

In its trading update for the 2019 financial year, the listed firm also records a year-end cash balance of £0.35m, with an unutilised bank facility of £0.5m, and debtors of £1m.

2019 saw new client acquisitions for ECSC up 24% to 118, with 17% generated from the partner programme, while R&D investment was around 13% of revenue.

Ian Mann, chief executive officer of ECSC, said: “We are very pleased that the record trading in H2 resulted in double digit organic annual revenue growth, and a return to adjusted EBITDA profitability.

“Growth in recurring revenue of over 25% shows the effectiveness of our strategy of winning consulting clients and converting them into long-term managed services clients.

“The acceleration of new client acquisitions in 2019 should help to build a solid foundation for future growth.”