Novacyt to Revise Down 1st Half Revenue Due to UK Covid-19 Contract Dispute -- Update
16 September 2021 - 7:50PM
Dow Jones News
By Sabela Ojea
Novacyt SA said Thursday that its revenue for the first half of
the year will be lower than originally announced as a result of its
dispute with the U.K. Department of Health and Social Care over a
supply contract, and that it will also book higher costs.
The clinical-diagnostics specialist, which is listed in France
and the U.K., said in April that the parties hadn't reached an
agreement to extend a contract for the supply of Covid-19
diagnostic kits and other products.
On Aug. 18, the company reported first-half revenue of 94.7
million pounds ($131.1 million).
But Novacyt said Thursday that it won't recognize revenue of
almost GBP40.8 million pounds booked in the first half in relation
to the contract.
The remaining first-half revenue of GBP54.0 million from
non-DHSC sales remains unchanged, Novacyt said.
The company is also booking an exceptional one-off cost of
GBP28.9 million, to write down inventory that it had built in
anticipation of further DHSC demand and to terminate agreements
with third parties regarding supply that is no longer required.
The company is also recognizing manufacturing costs of GBP6.9
million related to these disputed sales, it added.
The accounting treatment of the DHSC revenue and costs in the
first half doesn't change the company's legal position or rights in
relation to the dispute, Novacyt noted.
Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix
(END) Dow Jones Newswires
September 16, 2021 05:35 ET (09:35 GMT)
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