Evocutis getting balance right following integration

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SKIN specialist Evocutis said it has made good progress in commercialising its technology and is now a better balanced business after integrating a testing facility bought last year.

The Wetherby-based dermatology company changed its named from Syntopix Group in October after buying Leeds Skin for £900,000, a deal which transformed it into a services-dominated business.

Yesterday, the company said revenues more than doubled to £344,000 in the six months to the end of January, from £161,000 a year earlier.

That was more than the entire £227,000 revenue figure in its most recent financial year.

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

Analysts at house broker XCap Securities believe pre-tax losses should fall to about £200,000 in its 2013 financial year, while revenues should surge to £1.3m. They expect Evocutis to break even in 2014.

“This year was the first step change for us since the acquisition of Leeds Skin when we have got more a solid revenue base,” said finance director Darren Bamforth.

“We are starting to eat into those losses and heading towards a position where we can ultimately get to breakeven and profitable.

“The key is managing the cash burn and grabbing as much revenue as we can to avoid going back to the market for more money.”

It had cash of £1.8m at the end of January – enough to sustain the business for 18 months assuming no revenues.

The company now has three main specialisms – it offers contract research for laboratory testing, has its LabSkin living skin model and offers clinical testing to help cosmetics and pharmaceutical companies develop skin care products and ingredients.

“They generate revenue and are attracting new customers,” said chief executive Stephen Jones. “Interest in the technology platforms is increasing all the time.”

LabSkin is a novel skin simulator, and can be colonised with bacteria to test new products. However, it is not patented because Evocutis wants to keep its formula secret.

Evocutis floated on the Alternative Investment Market in 2006 as Syntopix, but has struggled to commercialise its compounds which claim to treat acne and skin problems.

Shares in Evocutis yesterday climbed 5.56 per cent, or 0.13 p, to close at 2.38p.