Collagen Solutions' losses widen ahead of 'transitional year'
Biomaterials developer Collagen Solutions lost more money in its last financial year amid lumpy revenues.
Collagen Solutions
6.62p
16:55 16/11/20
FTSE AIM All-Share
745.67
17:08 19/04/24
Health Care Equipment & Services
11,690.05
17:09 19/04/24
Collagen's revenues declined 11.2% year-on-year to £3.5m, falling short of market expectations and leading the company to warn investors of another potentially "transitional year" in terms of revenue generation.
Revenue was hindered by a temporary withdrawal of one client's tissue product, indefinite suspension of two customer projects, and one significant customer that had adjusted inventory levels.
However, the firm noted that "at least half of these declines could be reversed as they are not related to permanent customer losses but rather delays in projects or adjustment of inventory levels".
Collagen added that its main customer in Korea was not expected to place an order until next year, adding further pressure to the firm in its current year.
"We anticipate that we will have a significant year of growth and change, and it will be a transitional year in terms of new product development and revenue generation," the company said.
"A significant element of our anticipated revenue growth was going to come through the supply of pericardium tissue to a major customer and having geared up significantly to be able to meet predicted demand, our customer halted their own development programme in November resulting in the cancellation of anticipated orders," Collagen said.
Admin expenses across its locations in Glasgow, New Zealand and Minneapolis were little changed but sales and marketing costs increased, which, alongside the lower revenues saw the AIM-quoted company's losses before interest, tax, depreciation and amortisation widen 25.4% to £1.58m and pre-tax losses worsen by 63% to £2.62m.
As of 1200 BST, Collagen shares had sunk 15% to 2.55p.