EKF Diagnostics says first half earnings beat market forecasts

EKF Diagnostics, a medical diagnostics business, has achieved sales and earnings above market expectations in the first half following a difficult year in 2015.

With the firm’s revenue exceeding its budget, the board said it is confident that it will achieve the high end of its earnings before, interest, tax, depreciation and amortisation (EBITDA) target for the year at £3.5m ad £4.0m. Revenue for the first half is expected to exceed £16.5m.

Shares rose 10.32% to 13.10p at 1118 BST following the release.

EKF believes this level of performance will sustain into the future despite the imminent departure of the UK from the EU.

“EKF sales into EU countries are derived entirely from offices within the EU and US, with no such sales made from the UK and therefore global sales are not expected to be impacted,” the company said in a statement.

The company is currently undergoing a restructuring programme, the benefits of which will show in the profitability of 2017 according to the board.

The firm has also secured one major tender this year, the details of which were not specified.

Panmure Gordon reiterated a ‘buy’ rating and target price of 14p after the trading update. The broker also upgraded its full year 2016 estimates by 5% for revenues and 19% for EBITDA.

“A positive first half trading update from EKF shows that following the reorganisation and refocusing of the business around the turn of the year, growth has resumed across both the Point of Care and Central Lab divisions," it said.