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hVIVO reports stellar FY23, raises revenue targets, introduces annual dividend

15:08, 30th January 2024
Victor Parker
Vox Newswire
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hVIVO (HVOFollow | HVO, a contract research organisation specialising in human challenge trials, released a trading update for the year ended December 31, 2023. The group reported full-year revenues of £56.0m, up 15.5% from last year, with EBITDA margins of 22% from 18.7% in FY22.

Cash was £37.0m on December 31, 2023, up from £28.4m a year ago. The group's weighted contracted orderbook also increased to £80m, from £76m last year. With 90% of FY24 revenue already contracted, hVIVO retains good visibility into FY25.

hVIVO updated its FY24 revenue guidance to £62m with a new medium-term target of growing revenue to £100m by FY28. The group also announced the commencement of an annual dividend payment in 2024.

"In 2023, hVIVO demonstrated strong financial and operational performance, delivering record-breaking results across all key parameters. The sustained success of the Group, coupled with a growing orderbook, reinforces the resilience of our business model and reaffirms the stability of the market. The infectious disease market has witnessed increased interest from both commercial and non-profit entities, as well as a notable uptick in M&A activity. A significant highlight of the year was the market authorisation of the first-ever vaccine incorporating human challenge trial data as part of its submission package." commented Yamin Khan, CEO of hVIVO.


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Stellar results from hVIVO with a 15.5% increase in annual revenue, slightly ahead of market expectations, driven by continued strong delivery of human challenge trials and consulting services as the group recorded its highest number of inoculations to date. Likewise, margins jumped to 22% from 18.7% last year, thanks to increased staff utilisation, efficiencies in volunteer recruitment, and simultaneous running of multiple clinical trials. The better margins yielded higher cash generation, resulting in a much improved cash position at year-end of £37.0m.

Investors welcomed the results, sending HVO shares 10.4% higher on Tuesday. Shares are up 68% in the past 12 months. Investors were also excited about the announcement of a regular annual dividend, following HVO's one-off special dividend of £3.0m in 2023. The annual dividend will commence sometime after the group's audited full-year results are published in April 2024.

Demand remains high for hVIVO's growing portfolio of human challenge studies, which offer significant benefits to biopharma clients - namely fast and cost-effective data that enables fast-tracking of larger Phase 2 trials. hVIVO signed 3 large bespoke or full-service human challenge trial contracts in 2023 in Respiratory Syncytial Virus (RSV), Influenza B and Human Metapneumovirus (hMPV). With the range of services and average size of challenge studies increasing, the average contract value has increased as well, resulting in a weighted contracted orderbook for hVIVO of £80m on December 31, 2023.

hVIVO enters FY24 with strong momentum and 90% of revenue guidance already contracted. Revenue visibility is very strong into FY25 and indicative of the growing popularity and attractiveness of human challenge trials. The opening of hVIVO's new facility in Canary Wharf in H1 2024 should result in further EBITDA and margin gains, and allow the group to scale faster. hVIVO expects revenues of £62m in FY24 and aims for £100m by FY28.

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