GCIhVIVO achieves record revenue and EBITDA margin in H1 2024
() , a contract research organisation specialising in human challenge trials, issued a trading update for the 6 months to June 30, 2024.
hVIVO reported record revenues of £35.6m for the half, 30.6% higher year-on-year. EBITDA margin also improved materially to a record 24%, from 19.1% a year ago. Cash at period-end was £37.1m from £31.3m LY and the group's weighted contracted orderbook was worth £71m on June 30, 2024. hVIVO reaffirmed its full-year revenue guidance of £62m, expecting full-year EBITDA margins to be at the upper end of market forecast.
hVIVO said its new quarantine facility in Canary Wharf was now fully operational. For most of H1, was able to utilise both its old and new facilities while the transition was in progress, enabling the delivery of multiple projects ahead of schedule and boosting revenues. From July 2024, will operate solely from its Canary Wharf quarantine site, which means full-year revenues will be H1-weighted.
Yamin 'Mo' Khan, CEO, commenting: "The results of H1 2024 reflect the hard work, flexibility and commitment of the team. During a period of significant activity including the build-out and move to a new facility, we have not only materially increased our revenue but also further improved our margins. The concurrent running of three different facilities helped to boost our revenues for H1 2024, creating an expected H1 2024 weighting.
We have full visibility over our expected 2024 revenues and continue to deliver on our sustainable growth strategy. The orderbook remains strong in spite of record revenue delivery in H1 2024. The recent Omicron characterisation study contract and the award of our largest field study to date are two key sales highlights for H1 2024. In addition, the current sales pipeline includes several advanced stage opportunities that we expect to convert in the coming months.
The outlook for hVIVO is positive as we welcomed our first volunteers into our new facility at Canary Wharf - the world's largest human challenge trial unit. I believe we have laid the foundations for strong performance in the months and years ahead."
View from Vox
hVIVO reports record revenues and margins for H1, driven by exceptional operational delivery across the group, with a record number of volunteer inoculations across multiple studies and a variety of challenge models running simultaneously. This was facilitated by having access to 3 quarantine facilities during the period while transitining to its new facility in Canary Wharf. Investors should therefore expect an H1-weighted FY24 as the group will be operating solely from Canary Wharf from July 2024.
Margins jumped to 24% from 19.1% LY, due to enhanced operational efficiencies, good utilisation of the overlapping quarantine facilities, and continued improvement in FluCamp delivery. The better margins in yielded higher cash generation, resulting in a much improved cash position at period-end of £37.1m, following payment of the new annual dividend in May 2024. The new Canary Wharf facility should deliver even higher operational efficiency, boosting margins further in the medium term.
When fully online, the new state-of-the-art C3L quarantine unit in Canary Wharf will be the world's largest commercial human challenge trial unit, and should significantly diversify 's pipeline and further boost the group's financial perfomrance. The new facility will enable hVIVO to diversify its core human challenge trial offering to include new pathogen models.
hVIVO maintained a strong orderbook of £71m at period-end, with 100% of FY24 revenue guidance already contracted, giving full visibility for FY24 as well as excellent visibility for FY25. The orderbook value remained high despite the delivery of record turnover during the period, boosted by the aforementioned faster conversion vs previous periods. Overall, this indicates strong sales momentum, evidenced by recently won major contracts.
hVIVO reiterated its full-year guidance and the Board expressed confidence in meeting full-year market expectations. Management projects full-year EBITDA margins to be at the upper end of market expectations on the basis of the strong performance in H1 and full visibility for the remainder of the year. aims for £100m of revenues by FY28, which is highly achievable given its strong momentum and US$37m cash position.
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