hVIVO plc chief executive Yamin (Mo) Khan talked with Proactive about the company's impressive first half trading update for 2024, which shows record revenue and EBITDA margin.
Khan attributed this success to the dedicated team at hVIVO, highlighting a revenue recognition of £35.6 million, a 31% year-on-year increase.
Khan detailed how hVIVO has been able to conduct multiple trials simultaneously, utilising three different facilities, including their new state-of-the-art facility in Canary Wharf.
This move has allowed hVIVO to accelerate projects and improve margins. He also mentioned the company's strong weighted contracted order book, valued at £71 million, ensuring visibility into 2025.
Proactive: You've released a first-half trading update that shows record revenue and EBITDA margin. Can you tell us more?
Mo Khan: So an amazing set of results for us here at hVIVO for the first half of 2024, and it's all down to the amazing team we have working for us. We've been able to recognize just under £36 million pounds in revenue, £35.6 million to be exact. That's a 31% increase year on year.
Proactive: Your weighted contracted order book remained strong following delivery of a record level of revenue in the first half. Can you expand on this?
Mo Khan: Yeah. So £71 million pounds of a weighted order book. I'm glad you said weighted because that's important to bear in mind. So we assess every new contract we sign as to the probability of us recognizing 100% of the revenue or not. And we use that probability factor to determine what we should put into the actual order book.
So we are mitigating against any risk with regards to cancellations or postponements. But £71 million is a strong order book. We are 100% contracted for the rest of this year. We have visibility going into 2025. And remember, this £71 million pounds in order book is after recognizing almost £36 million pounds of revenue in the first half of this year.
Proactive: Looking forward Mo, you’ve reiterated your 2024 guidance, right?
Mo Khan: We have, and that's key for us. We always said that we will recognize around £62 million for this year. And that's something we're sticking to. We are confident we can deliver that. I also previously mentioned that because of the weighting of H1, we will recognize more revenue in H1 compared to H2. But overall that guidance is reaffirmed.
But when it comes to EBITDA, for the first half of this year we're looking to achieve around 24%. And for the full year of 2024, we think we will be at the upper end of what the market is expecting. So if you look at the different analyst reports, I think we will be towards the upper end of the range of the EBITDA projected from those guys. So we are very confident in our ability to deliver on our full-year 2024 numbers.
Proactive: You mentioned your new state-of-the-art facilities in Canary Wharf. How are they impacting the business?
Mo Khan: So they're just starting to make an impact. The facility here in Canary Wharf became operational for the quarantine unit in April of this year. And so, from April to June, we were utilising the three facilities. Like I mentioned earlier, we moved the admin offices and the lab in June of this year so that we're just getting going in that sense. But as we move forward, it does mean that we'll be able to diversify our range of services. So we are looking to add more laboratory revenues through our h-LAB platform.
This is a standalone pathology immunology lab that we have here at Canary Wharf and effectively, with regards to usable space, they are three times bigger than what they were in the old facility. So not only are we able to utilise them for our challenge trial work, but we also want to do some standalone lab work. So that's one item. The second key thing is that we look to add more field trials to our portfolio of services.
And we are converting the Plumbers Row facility, which we used to use as an office. We are converting that floor to add more screening space. So we are in fact doubling the number of bays that we have to be able to screen and vaccinate for future vaccine and field trials.
So those two are the key areas we're looking to diversify immediately. On top of that, we are looking at patient recruitment services through our FluCamp brand and a couple of other ancillary services.
So yeah, this facility allows us to diversify in various different ways. But more importantly, it allows us to increase our revenue cap from around £60 million to around £90 million. So yeah, it's a great place for us to lay our foundations and build the future of our company.
Proactive: You also recently signed your largest field study contract to date. Does this fit into your long-term growth plans for the business?
Mo Khan: Absolutely, it does. Our goal is that by the end of 2028, we expect to have around £100 million in revenue. The majority of that will come through organic growth, although we do have a small fraction of that coming from M&A activity, which is currently active. But with regards to the field trial, this is up to 1000 healthy volunteers we are looking to vaccinate. The study will start this year and finish next year.
And you're absolutely right, this does play a crucial role in the diversification of the services we want to offer. And I think field-based vaccine trials really are easy for us in the sense that we recruit and screen so many healthy volunteers for a challenge.
Those that do not qualify for the challenge trials could potentially take part in these field trials, especially with vaccine trials. So yes, it's good news that we moved to Canary Wharf and within a month or so, we signed our first Covid challenge trial or CL3 challenge trial that we could not have run in the old facility.
And then even before we had completed the fit to expand the screening vaccination side, we've already signed our first vaccine trials. So, those things have come really well. So, you know, the old ethos of "build it and they will come" has definitely been true for us.