GCIhVIVO reports stellar H1 with record revenues and margins, reaffirms full-year outlook
() , a contract research organisation specialising in human challenge trials, announced its interim results for the 6-month period ended June 30, 2024 (H1 2024).
hVIVO reported revenues of £35.6m, 30.6% higher year-on-year. EBITDA was up by 67.6% to £8.7m from £5.2m LY, and EBITDA margin jumped to 24.5% from 19.1% in H1 2023. Basic adjusted EPS similarly increased by 30.6% to 0.81p, and the group ended the half with £37.1m in cash, up from £31.3m LY. hVIVO's order contract book was worth £71m on June 30, 2024.
Operationally, marked a number of milestones in H1 2024. The group opened its new CL-3 quarantine facility in Canary Wharf and inoculated a record number of volunteers across 6 challenge trials and 5 challenge agents, partially thanks to greater use of automation at its recruitment arm FluCamp.
Major contracts signed during the period included a £6.3m Human Rhinovirus (common cold) contract signed with a biotech client, and a £2.5m Covid-19 Omicron characterisation study contract signed with a mid-sized pharma. was awarded its largest field study to date, representing a new income stream.
In terms of pipeline, highlights included a Human Metapneumovirus (hMPV) challenge agent manufactured and ready for partnering on a characterisation study, additional supply of Respiratory Syncytial Virus (RSV) challenge agent manufactured, and a Flu B challenge model established following completion of a characterisation study.
Post-period highlights included the completion of a fit-out of the Canary Wharf facility potentially leading to new revenue streams, the first major study contract signed by hLAB for standalone lab services, and the launch of FluCamp's tiered recruitment service.
Looking ahead, reaffirmed its full-year revenue guidance of £62m, expecting full-year EBITDA margins to be at the upper end of market forecast.
View from Vox
hVIVO reports a stellar first half with record revenues and margins, 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 transitioning to its new facility in Canary Wharf. Investors should therefore expect an H1-weighted FY24 as the group has operated solely from Canary Wharf since July 2024.
Margins jumped to 24.5% 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 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.
hVIVO new state-of-the-art CL-3 quarantine unit in Canary Wharf is now the world's largest commercial human challenge trial unit, and is expected to significantly diversify 's pipeline and further boost the group's financial performance. 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 revenue guidance of £62m, with management projecting 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. The group has a significant pipeline that is continuing to grow, including new challenge models and new revenue streams (eg clinical site studies, standalone lab services, and volunteer/patient recruitment), having short-to-medium term value of c. £40m. hVIVO aims for £100m of revenues by FY28, which is highly achievable given its strong sales momentum and US$37m cash position.
Follow News & Updates from hVIVO:
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.