hVIVO PLC has initiated an annual dividend policy as it reported strong earnings growth for last year, with 90% of 2024 revenue already contracted and its new world-beating human challenge trial facility in Canary Wharf facility opening this month.
The contract research organisation posted final results for 2023 confirming 16% growth in revenue to £56 million and showing underlying profits (EBITDA) up 44% to £13 million. EBITDA margins increased to 23.3% from 18.7%.
A statutory profit before tax of £11.15 million was made, from a £400,000 loss the year before.
hVIVO hailed increased operational efficiencies for yielding record margins and cash generation, with cash and equivalents rising to £37 million at the end of December, up from £28.4 million a year earlier.
Chief executive Mo Khan said these were record revenues, margins and profitability that underscored “not only the expansion of the market but also our ability and capacity to meet the increasing demand”.
2023, he said, saw further growth in the human challenge trial sector, driven by “increased recognition among Big Pharma and biotech firms of the compelling evidence supporting the efficacy of hVIVO's human challenge trials in expediting the development of novel vaccines and antivirals”.
The AIM- and Euronext-listed group inoculated a record number of volunteers across nine challenge trials in the year, including for Human Metapneumovirus (hMPV) and Respiratory Syncytial Virus (RSV), as well as signing multiple standalone and full-service human challenge contracts.
Having paid a one-off special dividend of £3.1 million last year, hVivo said it was now launching a full annual dividend policy, starting with 0.20p per share for a total payout of roughly £1.4 million.
Looking to the new financial year, Khan said trading in the first quarter was in line with expectations, with guidance for £60 million of revenue this year, weighted to the first half, with “sustainable EBITDA margins”.hVIVO set a new target of reaching £100 million revenue by 2028, bolstered by potential bolt-on acquisitions.
The period has seen a master services agreement signed with another mid-sized pharma client for human challenge trial services, though a separate characterisation trial was cancelled, with a cancellation fee paid.
Fit-out of the new Canary Wharf facility is said to be ahead of schedule, with Level 2 approval received from the UK Health and Safety Executive. This means hVivo expects the world's largest commercial human challenge trial unit, giving the group quarantine capacity of 50 beds, to be ready to start first quarantine in this month.