Tissue Regenix Group PLC (AIM:TRX, OTC:TSSNF), the medical technology company, should turn profitable in 2022, according to research house Hardman.
In a research note released following the company’s 2021 results, Hardman said the results revealed the early benefits of the company’s strategic initiatives over the last two years, namely the focus on commercial relationships, capacity expansion, restructuring to service demand and recovery in elective surgeries.
“On the basis of continued sales progression, TRX [Tissue Regenix] is forecast to become EBITDA-positive in fiscal 2022 and cash-generative in 2023,” Hardman said.
The journey towards positive cash generation should allay fears over the need for fundraising by the developer of biosurgery and orthopaedic technology.
“TRX has a broad portfolio of innovative regenerative products that are in demand from surgeons. Completion of Phase 1 of its capacity expansion programme has comforted distribution partners and provided positive momentum. We believe TRX is well-positioned to deliver strong sales growth, which will drive margin expansion and highlight the low rating of the shares,” Hardman concluded.
Shares in Tissue Regenix were up 1.9% at 0.55p in early deals, giving it a market capitalisation of £38.7mln.
Hardman reckons the valuation should be closer to £92mln, based on its benchmark of an enterprise value (market capitalisation adjusted for debt/cash) of four times projected 2023 sales.