Collagen Solutions reports solid revenue rise

Medical grade collagen component developer and manufacturer Collagen Solutions announced preliminary revenue, including other income, of £4.1m for the year ending 31 March on Tuesday, up from £3.2m in 2016.

The AIM-traded company said approximately £3.95m of that was trading revenue, representing 26% growth.

Its board explained that the growth was driven by an increase in the number of customers, higher volumes from key customers and an increase in new development agreements.

In particular, the company said it saw its pericardium tissue business grow by 30% resulting in a specific initiative to diversify and increase its tissue supply base in Australia and New Zealand to meet additional demand.

Investments in the company's commercial organisation also began to show results, with the team reportedly delivering nine new supply, development and distribution agreements during the financial year, including the recently announced Smart Matrix deal.

Those should provide future recurring revenues, as customers transition from development to full launch supply, the board said.

Due to long sales cycles and timing of appointments to the new sales team, the majority of those agreements were closed in the second half of the year, and as a result, they did not contribute materially to the 2016 revenue growth.

“We are on track with the commercial plans for our core business,” said CEO Jamal Rushdy.

“The investment that we have made in the commercial team is showing results and we are starting to see improved volume, value, and pace of origination in our pipeline of opportunities.

“We are also seeking to capitalise on the greater demand for pericardium that we are seeing and have implemented the appropriate operational focus to ensure we can support expected growth in this segment as well.”

Following the successful fundraising last month, Rushdy said Collagen Solutions also continued to make progress with its product development pipeline.

The company said it would announce its financial results for the year ending 31 March on 11 July.