Horizon Discovery Group plc
Pre-Close Trading Update
- Full year 2019 Group unaudited revenues from continuing
operations expected to increase by approximately 8%
to approximately £58.3 million
- Full year 2019 Group unaudited reported revenues expected to
increase by approximately 7% to approximately £62.9
million
Cambridge, UK, 4 February
2020: Horizon Discovery Group plc (LSE: HZD)
("Horizon" “the Group” or “the Company”), a global leader in the
application of gene editing and gene modulation technologies, today
provides an unaudited pre-close trading update for the year ended
31 December 2019. The Company expects to report its audited Full
Year 2019 results on 30 March 2020.
Horizon expects to report full year 2019
revenues from continuing operations1 of approximately £58.3 million
(FY 2018: £54.1 million), approximately £56.7 million on a constant
currency basis, representing growth of approximately 8% compared to
the prior year and approximately 5% on a constant currency basis.
Reported revenues for full year 2019 (including
continuing and discontinued operations1) are expected to be
approximately £62.9 million (FY 2018: £58.7 million), approximately
£61.2 million on a constant currency basis, representing growth of
approximately 7% compared to the prior year, and approximately 4%
on a constant currency basis.
Revenue growth during the year has been driven
by a strong performance in the Research Reagents and Screening
Business Units. BioProduction continued to perform well and
generated a strong second half performance but, as expected, ended
the year broadly flat year-on-year, reflecting the business unit’s
exceptionally strong prior-year comparator performance. As
previously reported, the Diagnostics Business Unit had a
challenging first half of the year, reporting revenues 28.6% down
on prior year. The Group took prompt action to rectify the
situation and under new leadership this business unit had a
stronger second half. In December 2019, the Company completed
its divestment of its non-core In Vivo business unit to Envigo RMS
LLC. Revenues generated in the period in the financial year
that the Company owned In Vivo are excluded from the Company’s
continuing operations set out in the table below.
Expected revenues and growth rates by
Business Unit (unaudited)
Business Unit |
Revenue £m |
Growth % |
|
FY19 |
FY18 |
Reported |
Constant Currency |
Research Reagents |
33.2 |
30.2 |
9.8 |
6.7 |
Screening |
11.4 |
8.9 |
27.7 |
24.7 |
BioProduction |
8.6 |
8.7 |
-1.7 |
-3.7 |
Diagnostics |
5.1 |
6.3 |
-18.8 |
-21.5 |
Total continuing operations |
58.3 |
54.1 |
7.6 |
4.7 |
In Vivo |
4.6 |
4.6 |
0.2 |
-2.3 |
Total continuing and discontinuing operations |
62.9 |
58.7 |
7.0 |
4.2 |
Adjusted EBITDA2 on continuing operations is
expected to be £3.9 million (FY18 £2.1 million). Total Adjusted
EBITDA2 on continuing and discontinued operations is expected to be
£1.5 million (FY18 £0.7 million).
Gross margin from continuing operations1 is
expected to be approximately 70.0% (FY 2018: 69.7%) with a
reduction in margin contribution from Diagnostics offset by
Screening and Research Reagents.
The Group cash balance of £18.8 million at year
end 2019 (HY 2019: £24.8 million) was in-line with expectations and
reflected continued investment in the business with a focus on
continued growth and increasing market share.
Outlook
Horizon has made good progress across the Group
in 2019. All four Business Units performed well in the second half
and this trend has continued at the start of 2020. The Group
continues to follow its Investing for Growth strategy with
continued investments in IT, Screening and R&D to support its
new Base Editing platform. Management believe this will help to
accelerate Horizon’s transformation into a high-growth, pure-play
tools and services company, and expects revenue growth in FY20 to
be in-line with expectations, and for the increased investments to
reduce FY20 EBITDA to a marginal loss for the year.
Terry Pizzie, Chief Executive Officer of
Horizon Discovery, commented:
“We have reported a solid full year 2019
performance based on the unaudited results against the backdrop of
a busy second half that has seen a number of notable developments
that will help to accelerate our transformation into a high-growth,
pure-play tools and services company.
“These include the divestment of our non-core In
Vivo business unit, and a new strategic collaboration with Mammoth
Biosciences, which will see us jointly develop new CRISPR tools to
develop a next-generation, technologically disruptive suite of CHO
cell lines that have been optimised to solve challenges in biologic
drug development. Just after year-end, following a year of
reviewing the technology, we exercised our option to exclusively
license a novel Base Editing platform from Rutgers, The State
University of New Jersey (US), for use in therapeutic, diagnostic
and service applications.
“We are committed to continued focused
investment in commercially-led, scientific innovation to stay at
the forefront of emerging technologies. By extending our
capabilities through in-licensing technologies, partnerships, and
collaborations, such as these, we seek to more closely align our
tools and services offering to the needs of our pharmaceutical,
biotech and academic partners.”
Notes
1 In December 2019, the Company completed its
divestment of its non-core In-Vivo business. In the period in
the 2019 financial year that the Company owned the In-Vivo
business, revenues of £4.6 million were generated. These are
excluded from the Company’s continuing operations FY2019 results
reported above. To guide investors, this trading update and
the Full Year results will each report the Group’s performance on
the basis of both continuing operations and discontinuing
operations.
2 EBITDA is a non-GAAP financial measure that we
define as net loss adjusted for investment income, finance costs,
taxation, depreciation and amortization, and exceptional items. For
discontinued operations, it is also adjusted for impairments,
onerous provision and loss on disposal.Ends
For further information from Horizon
Discovery Group plc, please contact:
Horizon Discovery Group
plcTerry Pizzie, Chief Executive OfficerJayesh Pankhania,
Chief Financial OfficerJon Davies, Head of Investor RelationsTel:
+44 (0) 1223 655 580
Numis Securities Limited (Broker and
NOMAD)Freddie Barnfield / Duncan MonteithTel: +44 (0) 207
260 1000
Consilium Strategic Communications
(Financial Media and Investor Relations)Mary-Jane Elliott
/ Matthew Neal / Melissa GardinerTel: +44 (0) 20 3709
5700Email: horizon@consilium-comms.com
Westwicke, an ICR Company (US Investor
Relations)Stephanie CarringtonTel. +1
646-277-1282Email: horizondiscovery@icrinc.com
About Horizon Discovery Group plc
www.horizondiscovery.com
Horizon Discovery Group plc (LSE: HZD)
("Horizon") drives the application of gene editing and gene
modulation within the global life science market – supporting
scientists on the path from research to therapy.
Built upon more than a decade of experience in
the engineering of cell lines, Horizon offers an unmatched
portfolio of tools and services to help scientists gain a greater
understanding of gene function, identify genetic drivers behind
human disease, deliver biotherapeutics, cellular and gene therapies
for precision medicine as well as develop and validate diagnostic
workflows.
Horizon’s solutions enable almost any gene to be
altered, or its function modulated, in human and other mammalian
cell lines.
The Group’s customers include many of the
world’s foremost academic institutes, global pharmaceutical and
biotechnology companies as well as clinical diagnostic
laboratories. Insight into the challenges faced by these
organizations enables Horizon to focus efforts on development of
innovative solutions that not only differentiate the Group’s
offering, but also fuel development of the next wave of precision
medicines.
Horizon is headquartered in Cambridge, UK with
offices in USA and Japan. The Group is listed on the London
Stock Exchange's AIM market under the ticker HZD.
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