Shares in point of care diagnostics company EKF Diagnostics (EKF:AIM) jumped 5% to 74p after management upgraded expectations for full-year 2021 earnings, which are set to be significantly ahead of prior guidance.
The reason for the upgrade is because EKF has seen strong demand for its Covid-19 sample collection kits.
This led to a significant expansion to its original UK contract into a multi-year global supply contract for an initial term of two years.
The contract is expected to facilitate future orders which will ‘materially contribute to 2021 and beyond.’
SAFE TRANSPORTATION
The company’s unique collection kit deactivates all viruses, bacteria, fungi and mycobacterium tuberculosis allowing safe sample handling and transport, greatly reducing risk of infection.
In the case of Covid-19 the technology can stabilise the virus for up to four weeks without the need for cold storage which means testing can take place outside of containment facilities, opening capacity in more testing laboratories.
MASSIVE UPGRADE
The trading performance in the first quarter was said to be materially ahead of management’s expectations and given the subsequent orders under the expanded contract the board is confident trading for the full year will be significantly better than previously expected.
N-1 Singer analyst Chris Glasper has upgraded his forecast for December 2021 revenues by 22% to £64 million and adjusted pre-tax profit by a whopping 40% to £15.5 million.
Glasper commented, ‘We continue to believe these estimates are cautious, albeit forward visibility is understandably somewhat limited at this stage.’
EKF reported full-year revenues up 45% to £65.3 million and pre-tax profit up 180% to £15.4 million resulting in basic earnings per share of 2.45p compared with 0.81p last year.
Following strong cash generation, the board has recommended a maiden dividend of 1p per share.
