Materials innovation company HeiQ (HEIQ) released maiden full year results on Wednesday showing revenues up 80% to $50.4 million and after-tax profit up 587% to $4.9 million.
Revenues were around 3% higher than the market expected while profits were pretty much in line as indicated in the 26 January trading update. The shares added 2.3% to 202p.
Last year represented a tipping point for HeiQ after launching the world leading antimicrobial Viroblock technology which has been used by over 150 brands and applied to at least one billion textile and medical products.
BUILDING SUSTAINABLE GROWTH
HeiQ has not rested on its laurels and in December purchased a Spanish medical products manufacturer which allows it to produce over 15 million face masks per month and provide in-house capabilities.
The company has expanded into three new markets including professional laundry, Paint and packaging coatings while in March HeiQ purchased 51% of Belgium biotech company Chrisal.
The acquisition gives the company access into the $50 billion probiotic market. Chrisal is profitable and addresses hospital hygiene and microbial management, serving over 50 US hospitals.
There are opportunities to cross sell the companies respective products as well as increase the overall client proposition by combining the company’s respective technologies.
HeiQ told Shares that the company was working on several projects which have the potential to deliver strong growth. Last year the company launched five new innovations and new products delivered over 40% of revenues.
The company has increased its sales and marketing capabilities by expanding the global sales network and has built a direct to consumer platform.
UPGRADE
The company’s product expansion and entry into new markets has prompted analyst Chris Donnellan at Cenkos to upgrade his 2021 revenue forecast by 14% to $57.6 million and EBITDA forecast (earnings before interest, taxes, depreciation, and amortisation) by 3% to $15.8 million.
For 2022 Cenkos is forecasting 15% revenue growth and 20% earnings per share growth. Donnellan said he believed the company ‘has the resources and ambition to achieve its goal of profitable growth in the mid-to-long term’ by investing heavily in the short term.
The focus on investing internally generated cash flow means the company doesn’t pay a dividend.
