RUA Life Sciences PLC on Friday said the first half of its financial year was hit by operational issues, although second-half performance ‘fully compensated’ this and that revenue is set to meet expectations.

Shares in RUA Life Sciences were up 25% to 13.70 pence each in London on Friday morning.

In a trading update for the financial year ended Sunday, the Glasgow, Scotland-based medical devices firm said the first half operational issues resulted in delayed shipment of products from its Contract Manufacturing business.

But the company said: ‘As anticipated, the revenue shortfall experienced during [the first half] has been fully compensated by a strong [second half] performance.’

Financial 2024 revenue is expected to be £2.2 million, in line with market expectations and unchanged from a year earlier.

RUA Life Sciences said the recovery in revenues has not been at the cost of gross margins, anticipating that reported margins will exceed expectations.

It also said it has focussed on cost control in the year, expecting annual operating costs of around £3.4 million, around £200,000 below market expectations for the year.

Chair Bill Brown commented: ‘Trading results for [financial] 2024 represent a meaningful step in delivering on the group’s strategy outlined in November, and the efforts to focus the business on growth are showing promise.’

On the Contract Manufacturing success, Brown continued: ‘Securing this contract underscores RUA’s expertise in implantable fabrics and moves us closer to profitability. It is our first major contract since the acquisition of RUA Medical Devices in 2020 and supports our belief that there are significant market opportunities in this area.’

RUA Life Sciences said ‘significant efforts’ have been focussed on business development activities as part of its strategy to reach profitability in the short term.

‘It has been the strategy to seek to grow the scale of contract manufacturing, and the company is pleased to announce that it has succeeded in securing the initial development stages of a significant contract with a global enterprise,’ the company said.

‘This contract represents a major milestone on the route to doubling revenues for the contract manufacturing division once fully operational. Initial development work under this contract has commenced, with an initial purchase order valued at £100,000 already received.’

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