SourceBio expects Covid-19 testing revenue to peak in coming months

Laboratory services provider SourceBio International said on Monday that it had continued to trade well since 31 December, with revenue, earnings and cash generation “significantly ahead” of 2020 in the year-to-date.

The AIM-traded firm, which was holding its annual general meeting, said that in relation to Covid-19 testing opportunities, it had moved “quickly” to evolve with the “fast-paced and ever-changing” market requirements necessary to support ongoing testing needs.

Executive chairman Jay LeCoque said the group remained focussed on expanding its offerings, technologies and routes-to-market, and had also pivoted away from the “heavy reliance” on PCR testing for the Department of Health and Social Care (DHSC) that initially underpinned its infectious disease testing business unit.

“SourceBio now supports a much broader portfolio of customers with whom we are already working or who are part of our growing pipeline,” LeCoque said.

“The board is pleased with progress in the year-to-date but recognises that it expects peak levels of revenue and earnings to be generated from the anticipated high levels of travel related testing expected in the coming months.

“The indicated demand of such travel related testing has provided the impetus to further expand the capacity of our Nottingham laboratory.”

The company was also pursuing additional laboratory capacity elsewhere in the UK in order to cope with the anticipated peak in demand, Jay LeCoque added.

If the forecasted volumes of business materialised, the firm would expect the 2021 financial results to be materially second-half weighted.

“The group's base business lines have now all returned to pre-pandemic levels of trading.

“In the healthcare diagnostics business unit, we are pleased to report that we have seen progressive increases in the volume of cellular pathology business returning to us in recent months as the numbers of elective surgeries now appear to be increasing with some momentum.

“This business was the final offering within our three well-established business units - healthcare diagnostics, genomics and stability storage - to return to more regular pre-Covid-19 levels of trading.”

SourceBio was continuing its pursuit of strategically relevant, earnings-enhancing acquisitions to augment the growth of its established business units, Jay LeCoque said, and to further strengthen its capabilities and offerings to customers.

He said the key criteria when exploring potential acquisitions would be how the firm could integrate those businesses into its current model to achieve accretive earnings.

“The group remains well positioned to support its customers and their requirements and we remain optimistic for the remainder of the year and beyond.

“The board would also like to thank shareholders for their continued support and all our dedicated staff and suppliers for their hard work and efforts in these challenging and changing times.

“We look forward to providing further updates on the group's trading and progress in due course.”

At 1517 BST, shares in SourceBio International were down 6.11% at 160.55p.