NextGen sales jump 65% as it gears up for assault on US market
Gene-to-protein company NextGen Group plc's (NGG.L) sales increased by 65% last year, while one-off management costs widened its operating loss by 19%.
In its maiden final results - it raised £1.8m in an AIM listing in late December - it said turnover was £1.01m in the year to end December.
Operating costs increased to £3.1m from £2.6m, mainly due to the inclusion of discounted share options granted to its top two executives, which attracted a charge of £0.4m. The Group also paid out £0.1m to founder and former director Kevin Auton as compensation for loss of office.
Gross profit margin slipped to 52.0% from 58.9% in 2004, due to the sale of consumables and reagents at a lower margin and the payment of sales commission to distributors in 2005.
NextGen provides software based systems, services and reagents enabling enhanced access to, and understanding of the role of, proteins in diagnosis and drug discovery.
The systems combine robotics, advanced engineering and rules-based software that range from partial to fully automated. NextGen also uses its systems and instruments to provide fee-for-service products to the pharmaceutical and biotechnology industry as well as to those in academic research.
Share price up
The market was pleased and the share gained 6% in a day dominated elsewhere by red ink. At 2.13p a share, the company is worth £14.8m.
Since the year end, the group has entered a commercial alliance with Michigan-based Proteomic Research Services Inc and made sales and marketing appointments in the USA covering the major geographical market centres.
Chairman Anthony Rhatigan said the business "has grown and will continue to thrive on innovation. 2006 will see a number of new areas of growth opportunity and the Group expects the strengthened sales and marketing team, particularly in North America to add significantly to its performance".
Sales progress
CEO James Gerald Heffernan (pictured) said sales of A2DE Optimiser, its 2D gel electrophoresis product, had continued for the first three months of 2006 at previous levels. With the US sales force now on the ground, there is more demand for product demonstrations which are expected to turn into firm sales.
It unveiled its BaculoWorkstation (a semi-integrated platform targeted at insect cell expressed proteins) and the ExpressionWorkstation (a robotic system) at a San Diego conference in January, which resulted in the first sale of the later product to a major multinational pharma and several orders and further enquiries for the former.
Its OrchestratorIMS, an information management system which controls its larger instrument platforms, was further developed so that it can be used on a standalone basis. Talks are underway with several pharmaceutical companies about installing this either as multiple user versions or enterprise wide. Several customers have also requested a feasibility study of using OrchestratorIMS to control third party hardware.
Asian market
A distributor training and business development trip to the Far East was undertaken in March. Distributors have been appointed in Japan, Korea, Taiwan, China and Singapore.
Mr Heffernan said that "a growing requirement for our products and services is anticipated from this market, but as with Western markets, lead times are significant and may indeed be longer".
24th May 2006
