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Highlights

  • Oxford Nanopore reports an adjusted EBITDA loss of GBP 61.6 million for H1FY24
  • FY24 guidance expects underlying revenue growth of 20-30% at constant currency (CC)
  • Company targets over 30% CC revenue CAGR by FY27, with cash flow positivity by FY28

Oxford Nanopore Technologies plc (LSE:ONT) specialises in molecular sensing using nanopore-based technology. The company operates in two segments: Life Science Research Tools, offering research products, and COVID Testing for SARS-CoV-2 solutions.

In the first half of the financial year 2024 (H1FY24), Oxford Nanopore reported an adjusted EBITDA loss of GBP 61.6 million, worsening from loss of GBP 39.4 million in H1FY23. It was primarily due to increased operational expenses linked to a larger workforce. Adjusted operating costs remained stable during the reported period, with a slight 2.0% increase compared to H2FY23, reflecting efficient cost control.

Revenue for the period was GBP 84.1 million, showing a 2.2% decline on a reported basis but flat at constant currency. Excluding a GBP 8.9 million headwind from COVID and EGP, underlying revenue grew 12.4% at constant currency, driven by strong performance in the EMEAI and APAC regions. In H1FY24, PromethION revenue surged by 39.0%, while MinION sales fell 10.8%, with other revenues increasing by 6.4%.

Recent Business Update

On 11 December 2024, Oxford Nanopore's SIP Trustee granted 106 partnership shares to director Nick Keher, acquired at GBP 1.42 per share using his gross salary. Following the SIP’s matching policy, the company issued 106 Matching Shares to the SIP Trustee on Keher's behalf.

Company Outlook

The company reaffirms its FY24 guidance, expecting underlying revenue growth of 20-30% at constant currency (CC). COVID-related headwinds are revised to GBP 17.5 million, with full-year CC revenue growth now projected at 7-16%. Gross margin is expected at 57%, with possible variability in H2. Medium-term guidance remains steady, aiming for over 30% CC revenue CAGR by FY27. Gross margins are expected above 62%, operating expenses to grow 3-8% CAGR, and adjusted EBITDA breakeven by FY27. Cash flow positivity is targeted for FY28, supported by market growth.

Top 10 Shareholders

The top 10 shareholders collectively form ~53.73% of the total shareholdings. IP Group PLC holds the maximum number of shares with ~9.94% shareholding, followed by Baillie Gifford & Co. with ~7.45% shareholding, as depicted in the chart below: 

Stock Performance

The stock has dropped approximately 12.34% in the past month but has risen about 21.88% over the last six months. Its 52-week range is GBX 85.00 (low) to GBX 203.00 (high), and it is currently trading below the midpoint of this range. On 8 January 2025, the stock closed at GBX 129.20.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference data for all price data, currency, technical indicators, support, and resistance levels is 08 January 2025. The reference data in this report has been partly sourced from EODHD/Others.