News Column

Bioquell On Track For Full-Year Expectations As It Swings To Loss

August 26, 2014

Hana Stewart-Smith

LONDON (Alliance News) - Bioquell PLC said it was on track to meet its expectations rise for the full-year, as it swung to a pretax loss in the half-year to the end of June as revenue declined, and it saw research, development and engineering costs rise.

The healthcare equipment manufacturer and supplier posted a pretax loss of GBP125,000 from a profit of GBP812,000 in the year before, as revenue fell to GBP20.7 million from GBP21.2 million, and research, development and engineering costs rose to GBP2.0 million from GBP1.2 million.

The company said that its first-half had been held back by issues at its Bio division. The division has been hit by consolidation amongst international pharmaceutical companies reducing the number of larger Life Science facilities in the UK, and the National Health Service being slow to adopt its technologies.

It implemented a cost reduction programme in the division, and reviewed its business models, which it expects to be broadly neutral in the current year but lead to yearly pretax cost savings of GBP1.4 million in the future.

"As we flagged up in May, the first half of this year has been extremely tough for our Bio division which has faced a number of difficulties," said Chairman Nigel Keen in a statement. "However, we have started a cost reduction programme, adjusted our business model and have made a number of senior management changes which should help us to generate an appropriate financial return from the division's core technology."

Gross margins were hit by changes in product mix in the Bio division and stronger sterling exchange rates, it said.

The company said that its Testing, Regulation and Compliance services division is well positioned for further growth, and it expects to see a good second half performance from this division, as the Bio division continues to undergo "significant changes."

Shares in Bioquell were trading down 1.2% at 89.40 pence Tuesday morning.

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Source: Alliance News

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