Shares of EKF Diagnostics (LON: EKF) are rallying on Tuesday after the company reported a 45% rise in revenue and a new multi-million dollar global supply contract.
EKF’s share price is currently trading over 5.67% higher at 74.60p.
The company’s results for the year ended 31 December 2020 revealed revenue came in at £65.3 million, a 45% increase on the £44.9 million in revenue in 2019.
EKF also made a pre-tax profit of £15.4 million compared to £5.5 million the previous year, while its earnings per share also rose from 2019, rising to 2.45p from 0.81p.
The significant improvement in its revenue and profits was put down to its Covid-19 related contract manufacturing business, although they said its core business held up well during the pandemic.
The AIM-listed business is also seeing a recovery in its core business in Q1 2021 with contract wins in several regions, including the US, and the first shipments of 1,000 DiaSpect Tm analysers made to South Africa following a tender win.
Elsewhere the company also reported a “Significant expansion of supply agreement for COVID-19 sample collection kits” with its partner from the private sector.
The original agreement covered the supply of COVID-19 sample collection kits for a staff testing programme for the UK only. The original contract began with an initial order worth £3m for the UK, with the company now receiving additional orders approaching a further £3m to support the contract's planned global expansion.
Under the new multiyear global supply contract, EKF will support its partner's world-wide staff testing initiative, with orders being fulfilled from production sites in the UK, Germany and the United States.
“EKF has come through 2020 in an extremely strong position. The Group has been able to make a real contribution to the fight against the COVID-19 pandemic, which sadly has been very costly for many in lives and income,” commented Christopher Mills, Non-Executive Chairman of EKF.
“Whilst necessarily maintaining a conservative approach to forecasting for our core business, we have already announced that our performance for the first quarter of 2021 will be materially ahead of expectations and the same quarter last year.
“This morning's news that we have expanded a key supply agreement to become a multi-million dollar global supply contract, means that we are confident that trading for the year ending 31 December 2021 will be significantly ahead of already upgraded expectations,” added Mills.
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