Novacyt says revenues and profit levels for 2021 could be lower than market expectations without supply contract for cov-19 tests
Novacyt shares (LON:NCYT), having fallen by well over 30% on Friday, are down again by 5% on Monday morning to 400p following warnings on revenues due to a dispute with the UK Department of Health and Social Care (DHSC).
The AIM-listed company has recently said “it has strong grounds to assert its contractual rights” by taking legal action as the DHSC said it would not extend a supply contract for Covid-19 tests.
The firm has said that its revenues and profit levels for 2021 could be lower than market expectations without the contract. The situation is compounded by Novacyt’s lack of clarity regarding sales as a result of the “ever-changing nature of the COVID-19 pandemic and diagnostic testing demands”.
A statement released by the company said: “Whilst the directors are confident new contract wins will continue as Novacyt expands international sales and into private sector testing, they believe revenue and profit for 2021 may be lower than current market expectations due to the absence of the DHSC contract extension.”
Novacyt delivered revenue for the first quarter of 2021 of GBP72.6 million, with 50% of this attributable to sales to the DHSC.
The Novacyt Group is an international diagnostics business generating an increasing portfolio of in vitro and molecular diagnostic tests.