Building momentum toward break-even

Novacyt reported FY16 results on 27 April. Headline sales announced in January showed that total FY16 sales grew 25% y-o-y to €11.1m (38% at a constant exchange rate, CER). The acquisition of Primerdesign (consolidated from May 2016) added to total group H216 sales, which grew an impressive 47% (68% at CER) y-o-y. Novacyt’s earnings showed that sales growth was accompanied by a substantial expansion in gross margin from 48.1% in FY15 to consolidated 54.9% in FY16 or 59.0% pro forma. All this boosted consolidated EBITDA close to break-even at -€0.7m in H216 versus €1.6m in H116. We find the combination of a continuing high growth trend and near break-even EBITDA comforting and supportive for the share price.