Evocutis expects £1m loss as growth in sales slows

The Wetherby-based company said that following strong revenue growth of 113 per cent in the first half of the financial year, revenues are expected to grow at a slower rate in the second half.

The group said it will make a pre-tax loss of between £1.0m and £1.2m for the year to July 31.

Total revenues for the year are expected to be around £460,000, up from £227,000 in 2011.

The company’s main revenues come from microbiology and laboratory services using its LabSkin technology.

Evocutis said these tend to be one-off contracts and their timing and size is difficult to predict.

At the end of May, the group had a £1.7m cash balance and it is debt free.

The group said it is confident it has sufficient cash to fund activities for at least the next 12 months.

Interim chief executive Dr Gwyn Humphreys said: “It is disappointing that sales revenue growth in the second half of the year is not as strong as the growth seen in the first half.

“However, total revenues for the year are expected to be approximately double those achieved in the prior year and we anticipate that the loss for the year will be lower than that of the prior year.”

He added that the advancement of the group’s LabSkin technology into a commercially available product for direct sale is an “exciting step” for the company.

Evocutis changed its name from Syntopix last year after buying Leeds Skin for £900,000, a deal which transformed it into a services-dominated business.

The group’s former executive Stephen Jones resigned last month.

Dr Jones left the skin technology group to join an unrelated healthcare company.

Dr Humphreys, a senior non-executive director of the company, has taken over as interim chief executive pending the appointment of a new chief executive.

The company said revenues doubled to £344,000 in the six months to the end of January.

Pre-tax losses of £434,000 were down from a £557,000 deficit a year earlier.

Analysts at house broker XCap Securities expect Evocutis to break even in 2014.

The company offers contract research for laboratory testing, has its LabSkin living skin model and offers clinical testing to develop skin care products and ingredients.