20 January 2016
Collagen Solutions plc (AIM: COS), the developer and manufacturer of medical grade collagen components for use in regenerative medicine, medical devices and in-vitro diagnostics, announces the following trading update for the period 1 October 2015 to year end 31 March 2016.
In the period, the Company has announced successful customer agreements, asset acquisitions and outlined potential revenue upside. However, there is a degree of uncertainty around timing of contracts and attaining critical mass of manufactured products. The Board believes that the uncertainties around revenue recognition are likely to impact on revenue for the year end 31 March 2016 as follows.
|Customer project cancelled||49|
|Lower than predicted order volumes||236|
|Customer delays (development, ordering, testing, regulatory)||359|
The total estimated effect will be to reduce the revenue for the year to approximately £2.8 million compared with previous market consensus expectations of £3.6 million and LBITDA now expected to be approximately £750,000 compared with a consensus of £602,000.
The Company has previously announced the recruitment of Mr Tom Hyland as Chief Operating Officer and Jamal Rushdy as Chief Business Officer. We have also added a new Commercial Manager for the EMEA region. Together, these individuals will improve our commercial operations and manufacturing processes in order to meet a diverse and growing demand for our products and services. This is with the aim of ensuring we mitigate future uncertainties around revenue recognition and increase operational capability.
Recent announcements, including the direct supply agreement to Histogenics and the agreement with BBI Solutions, provide the Company with greater exposure to cutting edge collagen-based therapeutic devices and immediate short term revenue channels. The Company envisages similar announcements will be forthcoming.
The Board remain both confident and positive regarding the future revenue growth of the Company in addition to its value-added activities around the recent acquisition of the Chondromimetic product and its portfolio of IP assets covering a family of similar products.
David Evans, Non-Executive Chairman, commented, "Whilst I understand there will be a significant level of frustration with today's announcement and whilst I share that sense of frustration, I am of the view that while the overall direction of travel is positive - we clearly need to move up a gear and fill the hopper with sufficient opportunities such that single customer delays do not have such a material impact upon the year-end out-turn.
"I remain very confident about the future based on the recent strengthening of our Commercial Team in the US and Europe and this will be strengthened further in Asia in this quarter. Additionally, our pipeline is the strongest it has been during my tenure as Chairman. I am prepared to back this sense of confidence by increasing my holding in the Company over the coming days."
|Collagen Solutions Plc|
|David Evans, Chairman||Tel: 07740 084 452|
|Stewart White, CEO||Tel: 0141 558 2008|
|Panmure Gordon & Co (Nominated Advisor and Broker)|
|Robert Naylor (Corporate Finance)||Tel: 020 7886 2714|
|Maisie Atkinson (Corporate Broking)||Tel: 020 7886 2905|
|Walbrook PR Ltd||Tel: 020 7933 8780 or firstname.lastname@example.org|
|Mike Wort||Mob: 07900 608 002|
|Anna Dunphy||Mob: 07876 741 001|