Although we dont believe in timing the market or panicking over every stock fluctuation, understanding how a business is performing, competing and changing is vital to sensible investment.
What: The share price ofEKF Diagnostics (LSE: EKF) the Cardiff-basedmanufacturer of point-of-care analysis equipment for the diagnosis ofanaemia, diabetes and associated conditions tumbled as much 15% in trading so far today, following publication of the companysinterim results for the first-half of2014. At the time of writing EKFs share price has recovered somewhat, but is still over 11% down.
So What: EKF has made a pre-tax loss of 2.47m. The company says the loss is largely attributable to exceptional items, which principally includewrite-off of costs associated with acquisitions made during the period, the cost of transferring itsQuotient business to Germany, and the increased amortisation of intangibles.
Revenue was up 12.6%, to 16.77m, despite adverse exchange rates, with underlying organic growth at constant currency of 3.4%. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were up 4.7%, to 2.22m, but the company says they were negatively affected byexchange rates and bycontinued investment in sales and business development infrastructure.
What Now: EKF says it expects its three acquisitions Separation Technology, Inc., DiaSpect Medical AB, and Selah Genomics, Inc willmaterially enhance its product portfolioand that itexpects them to make a considerable contribution to future growth.
Commenting on EKFs outlook, executive chairman David Evans said:
Whilst trading conditions continue to be challenging, the general outlook for the second half is very positive, not only in terms of operational improvements and the long term strategic positioning of the Group, but also in terms of the further organic growth we anticipate and the first full six month contribution from our recent acquisitions.
We remain confident of meeting market expectations for the full year. Our focus in the second half and beyond is on rebuilding shareholder value. Form is temporary but class is permanent and we believe we have a first class offering.
At 22p, EKFs share price is down 37% so far this year, compared with a 9% drop in the AIM All-Share index. However, since it listed on AIM in July 2010, EKFs share price has increased by 32%, leaving the AIM index trailing with a gain of just 16%.
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Jon Wallis has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
