By Kristy Dorsey
Glasgow-based Collagen Solutions has said it is “encouraged about the year ahead”, though its latest trading update made no reference to continuing talks to sell all or part of the business.
The medical materials specialist has also been granted a three-month extension on filing its accounts for the financial year that ended on March 31, which would normally be due by the end of September. As a result, the year-end accounts will not be presented at its annual general meeting.
Since its last trading update on April 23, the company said it has performed “in line with its expectations in the current environment”. Covid-19 has resulted in logistical difficulties and challenges to abattoir production in Australia and New Zealand, where Collagen Solutions sources some of its key raw materials.
However, it has yet to see any decline in demand in the current financial year for its services and products, which range from heart valves and bone grafts through to wound dressings. This even though many customers in the orthopaedics, cardiovascular and dental surgery end-markets have been impacted by the reduction of non-emergency and elective procedures during the pandemic.
As of June 8, the company had revenues, orders and contracted development milestones worth a combined £3.3 million for the 12 months to March 2021, equal to 82% of last year’s annual revenues. In addition, there is “further visibility on contracted development milestones” that should add to the order book.
As previously announced, the company has completed a £500,000 project to increase capacity at its Glasgow facility by “at least” 85%, which will ease manufacturing constraints. With the easing of current lockdown restrictions, it expects to achieve full capacity during the second quarter from July through to September.
The statement made no mention of the formal sale process that was first revealed on April 16, and no one from the company was available yesterday for comment.
Having initially confirmed that it was in discussions with “a number of parties” regarding a possible deal, Collagen Solutions set a deadline of May 15 for indications of interest. On May 18 the AIM-listed company said there was a potential offer to buy the whole of the company, as well as a “purchase or investment in part of the business”.
There was also interest in a refinancing, though Collagen Solutions emphasised there was “no certainty” of any offer being made.
In yesterday’s announcement, Collagen Solutions said it is in advanced discussions with debt provider Norgine Ventures to amend its current facility arrangements. As of June 12, it had £1.8m in cash.
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