Novacyt S.A. ("Novacyt", the "Company" or the "Group") Strategy and Full Year 2021 Trading Update

Regulatory News:

Novacyt (EURONEXT GROWTH: ALNOV; AIM: NCYT), an international specialist in clinical diagnostics, announces an unaudited trading update for the year ended 31 December 2021, together with a strategy update following Chief Executive Officer David Allmond’s first 100 days with the Company. Reported revenues and EBITDA for the period are both expected to be in line with expectations. The Company intends to announce its 2021 audited full year results in the week commencing 25 April 2022.

David Allmond, Group Chief Executive Officer of Novacyt, commented:

“In 2021, we delivered a financial performance in line with expectations, excluding our ongoing dispute with the DHSC. This highlighted the agility of the Company to rapidly respond to the changing marketplace for our products, with a noticeable increase in demand from the private market for COVID-19 testing in travel, sport, film, media, and workplace settings.

“During my first 100 days as Chief Executive Officer of Novacyt I have undertaken a holistic review of the business and I am pleased to deliver my preliminary findings. We remain committed to becoming a leading, global clinical diagnostics company in the fight against infectious diseases, which will be enabled by strengthening the team, our core business and enhancing our position as a “global first responder” to outbreaks of novel pathogens. We will also endeavour to streamline our R&D programme to ensure we are keenly focused on commercially attractive opportunities and bringing the right solutions, to the right customers at the right time. We will also re-evaluate how we leverage our products in each of our target global markets as we continue on our path of international expansion.

“I am convinced, as I was when I joined Novacyt in October 2021, that the Company has the key ingredients in place to build towards the next phase of growth and will continue making a significant contribution to global health while delivering value to our shareholders. As we invest in non-COVID-19 product development to tackle high unmet needs and bolster our business development efforts, I am excited about the future for Novacyt as a strengthened organisation with a clear strategic focus.”

Financial highlights

• Underlying revenue for FY2021 was £95.8m, compared to £277.2m for FY2020, excluding £40.8m of DHSC revenues under contractual dispute, as previously announced, in line with management guidance of approximately £100m
• Revenue derived from COVID-19 products accounted for 86% in FY2021, compared to 95% in FY2020
• As announced in August 2021, the year saw a significant shift away from large, centralised contracts towards independent testing, focused on private laboratories and non-governmental organisations (NGOs)
  • Private laboratory revenues increased by 98% year-on-year from £28.3m to £55.9m, which includes £10.5m of revenue from NGOs
  • Private testing accounted for 58% of FY2021 revenue at £55.9m, compared to 10% in FY2020 at £28.2m
  • The UK represented 45% of total revenue in FY2021 at £42.7m versus 79% in FY2020 at £219.4m
• Group gross margin before exceptional items is expected to be in the region of 70%
• FY2021 EBITDA before exceptional items is expected to be above £36.0m (FY2020: £176.1m), i.e. a margin greater than 37%, in line with management guidance of approximately 40%
• The Company’s cash position at 31 December 2021 was £101.8m, compared to £91.8m at 31 December 2020 and £77.2m at 30 June 2021

Operational highlights