---ADDS BROKER COMMENT AND SHARE PRICE---
The top line of parasite control specialist TyraTech (LON:TYR) headed sharply north last year, as the company secured distribution deals for its head lice products.
In the US, the company secured nationwide distribution for its Vamousse lice treatment with the world's largest retailer, Walmart, and is also got stocked by online giant Amazon.
Overall gross revenue for 2014 was up 250% year-on-year to US$4.9mln from US$1.4mln in 2013, with the increase largely due to US$2.8mln of sales of products, which supplemented the collaborative revenues the company has traditionally received.
Gross profit shot up to US$3.5mln from US$0.6mln in 2013, lifting the gross margin to 74.9% from 46.3%. Of course, product launches cost money, and business development costs and expenses rose US$3.0mln from the year before, despite which the loss before tax only broadened by US$0.7mln to US$5.1mln.
At the end of the year the company has cash plus cash equivalents of US$2.2mln, up from US$0.9mln at the end of 2013.
Trading in the new financial year has been in line with expectations, but the company reminded investors that the head lice treatment market is a seasonal one, with the big selling period being when kids go back to school after the summer holidays.
While Vamousse is garnering most of the attention, the company's Guardian personal mosquito and tick repellent and its OutSmart equine fly repellent are both now available, and building up reputations in the marketplace.
“We have demonstrated the strength of our technology in different market segments, the breadth of our product portfolio, and the agility of our business model,” said Bruno Jactel, chief executive officer of TyraTech.
“We believe that the medium term outlook for the company is strong as our technology continues to be commercialised into new products and geographies," he added.
House broker Allenby said TyraTech's revenue and profits were in line with its forecasts, and although cash burn was US$400,000 higher than it had anticipated, the company is still in position to self-finance its progression to cash break-even and profitability.
The 2014 sales figure included an eight-month contribution from Vamousse, but Allenby cautioned against extrapolation the numbers over a 12-month period as sales of head lice treatments are highly seasonal.
“In the short term to medium term we expect TyraTech to increase the distribution base for Vamousse treatment in both the USA and the UK and to increase the availability of its protective shampoo,” Allenby's Ian Jermin said.
“Expansion of the technology into new market segments (insect repellent with the Guardian brand and animal health products) will continue but given the need to conserve cash full commercialisation of these products will probably remain secondary to the Vamousse product range,” Jermin speculated.
The broker is leaving its forecasts unchanged for now.
It expects the company to end 2015 with cash of around US$1.5mln, with the cash pile rising to US$2mln by the end of 2016, but much depends on the rate of production expansion and trading conditions.
Nevertheless, Jermin remains hopeful that the company can achieve cash break-even and positive earnings before interest, tax, depreciation and amortisation (EBITDA) without having to raise any more cash.
Shares in TyraTech were off 0.25p at 4.5p in late afternoon trading, but are up 12.2% year-to-date.