(Alliance News) – EKF Diagnostics Holdings PLC on Monday said it anticipates its 2022 earnings will be below market expectations as it shifts its focus away from Covid-19, while who also announced that the chief executive officer and its president are stepping down from their roles.
The Cardiff-based diagnostics and central laboratory analysis manufacturer said CEO Mike Salter will step down but remain part of the company’s management team. Chair Christopher Mills also steps down from his role but remains as a non-executive director.
To lead the company while it searches for a new CEO, EKF has promoted Deputy President Julian Baines to executive chairman, effective immediately.
To focus on the new role at EKF, Baines will step down as chairman and from the board of New York-based digital health platform provider Trellus Health PLC, which on Monday said it appointed Senior Independent Director Daniel Mahony as non-executive chairman with immediate effect.
Noting the anticipated results for 2022 that it plans to release in late March, EKF said “the transition to non-Covid revenue in both contract manufacturing and laboratory testing is progressing forward, but it is taking longer than originally anticipated.”
EKF Diagnostics expects adjusted earnings before interest, tax, depreciation and amortization to be slightly below market expectations due to underperformance in contract manufacturing and laboratory testing. Group cash excluding net borrowings at 31 December was 42% lower at GBP11.4 million from GBP19.6 million a year earlier. The lower cash reflected “planned investments made during the year, including significant capital expenditures to increase the company’s enzyme fermentation capacity in the United States,” EKF said.
Meanwhile, EKF noted that its cash in Russia on December 31 jumped 85% to GBP2.4 million from GBP1.3 million a year ago, as international sanctions against Russia following its invasion of the Ukraine means that EKF cannot pay cash dividends from its 60%. -subsidiary owned there.
For 2022, EKF noted that “it will recognize large exceptional costs, but this will lead to stronger and clearer foundations for 2023.”
Looking ahead, EKF said it expects to benefit from cost reductions in 2023 amid restructuring and operational efficiency measures being implemented.
EKF Diagnostics shares were 18% lower at 32.23 pence each in London on Monday morning, while Trellus Health shares fell 5.9% to 8.00p each.
By Tom Budszus, Alliance News reporter
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