Belluscura PLC on Tuesday warned sales and adjusted earnings would be below market expectations due to the delay in closing the acquisition of TMT Acquisition PLC.
Shares in Belluscura slumped 47% to 9.82 pence in London on Tuesday.
The London-headquartered medical device developer said although it was early in its financial year, the delay in completing the acquisition of TMT, had seen sales and manufacturing progress on both the X-PLOR and DISCOV-R products pushed back by at least four months compared to previous expectations.
Belluscura said due to the delay it had revised its commercial activity in order to preserve cash resources.
This resulted in a delay in selling into the profitable direct to consumer market and pushed back the launch of the DISCOV-R product.
As a result, it now expects operating cashflow to be positive in the first quarter of 2025 and thereafter.
It expects to achieve positive adjusted earnings before interest, tax, depreciation and amortisation from the third quarter of 2024 onwards.
Revenue for 2024 is expected to be lower than market expectations at $16 to $19 million with an adjusted loss before interest, tax, depreciation and amortisation of $0.75 million to $1.5 million.
This compared to a company-cited consensus of $22.5 million for revenue and $1.5 million for adjusted Ebitda.
Belluscura said at March 31 it had a cash balance of around $3 million.
Belluscura said the audit of 2023 accounts was progressing satisfactorily, but that it expects to make one-time fair value adjustments for inventory, future supply arrangements for raw materials and warranty provisions for product supplied in 2023 and earlier years.
In addition, the company has decided to move the majority of its manufacturing operations to its Chinese partner InnoMax by the beginning of the third quarter, which should result in a ‘significant, immediate and long-term reduction in the cost of goods, as well as increased manufacturing capacity.’
Chief Executive Robert Rauker said it was ‘disappointing that cashflow breakeven has been delayed to Q1 2025. However, the actions we have taken to manufacture the great majority of our products through InnoMax in China will result in significant savings in the cost of goods, resulting in a material improvement to gross profit.’
In October, Belluscura announced it had agreed to buy TMT Acquisition in an all-share deal, valuing it at £5.8 million.
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