EKF diagnosis updated the market on its strengthening cash position on Monday, after disclosing £6.7 million growth in working capital in its 2021 results, “particularly due to additional inventory held in the US. United”.
Listed company AIM said the increase in inventory included inventory associated with Covid-related contract manufacturing services in the United States.
He confirmed on Monday that he has now received a cash payment of $5.5 million in connection with the inventory.
The accounting effect of the payment would represent an improvement in both revenue and adjusted EBITDA for the current fiscal year ending December 31, although the amount of the improvement has yet to be confirmed. .
As such, the board said it was not looking to change analyst guidance on trading and the outlook for 2022 at this stage, but planned to provide an update on normal course of business. as part of the announcement of interim results in September.
EKF said its cash position, net of borrowings, as of May 31 increased to £21.2 million from £19.6 million at the end of the previous year.
The most recent figure included funds related to inventory, while also reflecting the execution of its £4 million buyback programme, under which nine million ordinary shares were repurchased and cancelled, and a additional £2.5 million investment in Verici Dx.
“We are very pleased to confirm this further increase in our already strong cash position,” said Managing Director Mike Salter.
“Receiving this cash payment is an important step towards a clean break from Covid-related services for our contract manufacturing business as we move into new areas.
“Our strong cash position allows us to continue to execute our investment strategy for sustainable future growth.”
As of 09:18 BST, shares of EKF Diagnostics Holdings were down 1.08% at 37.39p.
Reporting by Josh White on Sharecast.com.