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Novacyt Q&A with Graham Mullis: Building for Long-Term Shareholder Value

Novacyt was undoubtedly one of the best, if not the best success stories in terms of financial and market performance last year.

The share price of Novacyt commenced 2020 at around 14p per share and has sustainability soared over 5000% to today’s price of £7.68.

Since we last spoke to CEO Graham Mullis some moths ago, Novacyt has delivered as it said it would. Revenues for the full year increased by 20 times to £277m, EBITDA soared to £187m with a cash position of £91.8m – such impressive numbers are a rarity on AIM and would be the envy of many of the FTSE 250.

Cash rich, with proven innovation and operational delivery capabilities the question in every investor’s mind is where next for Novacyt. Find out in our Q&A with Graham in which he highlights why he believes this is just the start of the future of the business and how he is determined to create long-term value for shareholders.

Novacyt appeared to truly deliver in 2020, how did your performance fare against your own expectations?

During 2020, Novacyt focused on ensuring it could meet the ongoing high demand for its Covid-19 products in a rapidly evolving market. Using our expertise and market intelligence in the rapid development of molecular diagnostic solutions, we continued to innovate ahead of market needs, reinforcing Novacyt’s position at the forefront of the diagnostic response to the pandemic. We are extremely proud of what we have achieved during 2020 and we remain focused on continuing to identify and address market needs to deliver long-term growth.

Since the start of the pandemic, the Group has expanded its manufacturing capacity by over 100 times, increased its global presence, supplying its products to over 130 countries, and developed 12 new products to support laboratories and clinicians in tackling COVID-19.

Novacyt also secured significant contracts with national governments and other national non-government organisations (NGOs) for the supply of its COVID-19 products.

In addition, the Company’s strong financial position enabled it to settle all outstanding debt, invest in increased manufacturing capacity, make a strategically important acquisition, and conclude the year with significant levels of cash to reinvest in the business. This first-mover advantage and rapid, effective scale-up has led to the transformation of Novacyt into a leading European molecular diagnostics player.

At the start of the pandemic nobody knew what would happen, but I think we would safely say our expectations were exceeded throughout 2020.

Despite the incredible financial performance, shares in Novacyt fell following your results – did this surprise you?

“Our focus has been on the operations and delivering on diverse customer needs, ensuring the company remains well positioned to continue to grow in line with our stated strategy of creating long-term value for shareholders.”

Graham Mullis, CEO of Novacyt

During the next 2 years, what opportunities do you foresee to use your strong cash balance and build on your success?

Looking ahead, the Company will continue to leverage the strong momentum it has built as a leading European molecular diagnostics player in infectious diseases, in line with its growth strategy. With the strengthened cash position of the Company, Novacyt will continue to invest in its commercial and development infrastructure as the Company continues to redefine its R&D pipeline and establish a direct sales force in key markets in the US and across Europe.

The Company also continues to evaluate M&A opportunities and will consider additional bolt-on acquisitions to add strategic assets and functionality to the expanding Group.

Longer-term, would you envisage becoming a mid-cap and what’s the overall vision compared to where it is today?

During the past year, Novacyt developed its market leading position in COVID-19 PCR testing, allowing it to significantly increase its customer base and reputation for innovation and high product performance. Novacyt already has an extensive product range and expects this core business to benefit from the Company’s increased reputation and infrastructure.

In addition, the Company expects to develop, manufacture and commercialise new infectious disease products, as well as make selective acquisitions, building on its position as a leading European molecular diagnostic player in infectious diseases.

Assume you were fortunate enough to bump into Warren Buffet (again), what would be your elevator pitch for him to consider investing in Novacyt right now?

We are at the start of an exciting journey as we continue to strengthen our position as a leading European molecular diagnostic manufacturer. Novacyt has played its part as a disrupter in a dynamic diagnostics market during this pandemic. We are leveraging the Company’s strong financial position to introduce new products and work-flow innovations, as well as making strategically important acquisitions to secure key IP and expand Novacyt’s core capabilities and product offering.

In addition, we are strengthening the team across the company to meet new opportunities created by an increased interest for diagnostics and we are excited about the Company’s next stage of growth.


Thank you to Graham Mullis for his time and we look forward to seeing how Novacyt continues on its growth trajectory this year.

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