In conversation with Proactive's Stephen Gunnion, hVIVO PLC chief executive Yamin 'Mo' Khan shared insights into the company's impressive financial performance for the year 2023. Amidst a backdrop of strategic expansion and robust growth, hVIVO has set new records, underlining its success and forward momentum in the pharmaceutical and clinical research industry.
Stephen Gunnion (SG): Mo, hVIVO has just released its trading update, boasting some significant achievements for 2023. Could you break down these financial highlights for us?
Mo Khan (MK): Certainly, Stephen, and thank you for having me. 2023 was a remarkable year for hVIVO across all key financial indicators — revenue, EBITDA, cash position, and our order book, all hitting record highs. We reported a revenue of £56 million, marking a 15% increase year on year.
This growth stems from our successful human challenge trial models and the expansion of our clinical consulting services.
Our EBITDA margins reached 22%, with an overall EBITDA increase of over 30% from the previous year, a testament to the efficiency and effectiveness of our operations and the significant contributions from our subsidiaries.
SG: With an order book valued at £80 million at year's end, how does hVIVO approach revenue recognition for these contracts?
MK: We've adopted a conservative and prudent approach by using weighted estimates to forecast revenue recognition more accurately. This method has helped us achieve an order book of £80 million, the highest in our company's history, providing us with over 90% visibility for 2024 and even bookings into 2025. It's a strategic move that underlines our confidence in our operational capabilities and market demand for our services.
SG: Looking ahead, what are hVIVO's projections and plans for 2024 and beyond?
MK: We're very optimistic about the future, targeting a revenue of £62 million for 2024. We plan to introduce three new challenge models and move to a new facility in Canary Wharf, which will enable us to diversify our product and service offerings further and accommodate our growth. These steps, combined with our robust order book, position us well for sustained growth and success.
SG: With such a strong financial footing, hVIVO has announced the launch of an annual dividend. Can you share more about this decision?
MK: After a special dividend of £3 million in 2023 and a healthy cash balance of £37 million, we're in a position to start providing annual dividends. This move reflects our financial health and our commitment to delivering value to our shareholders. We will provide more details on our dividend policy with the publication of our annual report.
SG: Finally, what are hVIVO's strategic goals in the short to medium term?
MK: Our strategy includes leveraging our strong cash position for strategic mergers and acquisitions to complement our existing business and explore new revenue streams without diverging into unrelated business areas. Our target is to achieve £100 million in revenue by 2028 through expanded human challenge trials, early clinical development consulting services, and strategic M&A activities. We're confident in our foundation and our team's ability to reach these ambitious goals.