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29 April, 2019 - 11:19 By Tony Quested

Market fails to spot Horizon Discovery’s relentless march to global glory

Terry Pizzie of Horizon Discovery

Brokers almost lazily slapped on ‘hold’ recommendations; the UK share price merely quivered – but Cambridge UK gene editing world leader Horizon Discovery today unveiled a roadmap to global glory and simultaneously became a potential stellar acquisition target.

The real potential of the business lies far deeper than the headline figures which showed a 73 per cent revenue increase to £60.5 million on a constant currency basis for the year to December 31.

Horizon posted a 148 per cent increase in research products revenue and 72 per cent rise in applied products revenue – both of which were only partially offset by a 21 per cent decline in services revenue.

Gross margin increased to 67.3 per cent driven by a combination of the full-year effect of Dharmacon, increase in licence revenue, product optimisation and change in mix towards higher-margin products.

The group loss after tax of £35.8m for the full year was misleading: Basically, Horizon has cleared the decks for a sensational next year, bolstered by a robust cash position with cash of £26.7m, astute capital management and a keen eye on where the killer values reside within the group. 

The development and implementation of a new investment strategy, focusing on core markets with highest growth potential, is paying handsome dividends and Dharmacon is performing brilliantly.

A new eCommerce platform will be launched in H219 to support enhanced customer experience and drive future revenue growth while process improvements and automation are expected to increase capacity in cell line engineering.

The board reports positive sales momentum in the first quarter of 2019 and expects FY19 revenues to be in-line with current market expectations.

CEO Terry Pizzie said: “Given that 2018 was a year of change for the business, it is even more pleasing that the group was able to report a strong set of results for the year, with a substantial increase in reported revenues, gross margin improvements and, for the first time, a positive adjusted EBITDA.

“Our customers include many of the world's leading academic institutes and global pharmaceutical companies. Our expertise and insights into the challenges that they face is driving us to create products and services that not only differentiate our business, but also help our customers to achieve a deeper understanding of biological systems, thereby fuelling the development of the next wave of precision medicine.

“I believe that our commercial excellence, scientific innovation and industry know-how remain key differentiators. Our 'Investing for Growth' strategy will see the business shift from a scientifically-led life sciences company to a fully commercial tools company, which will mean that Horizon is increasingly well placed to capitalise on its market-leading position to drive sustained top-line growth.”

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