EKF Diagnostics delivered its Interim results this morning which not surprisingly made for positive and impressive reading, as per the companies previous update.
Perhaps also not surprising though, was the immediate retrace in the share price by a few pence which is often the case with stocks on delivery day, but which in turn, can provide for further opportunity for those investors with a longer term horizon.
But in EKF's case, whilst that longer term picture looks extremely positive, the near term prospects also provide for the potential of further upside to come, as there are now many fast moving parts to the business running aside the strong driver of PrimeStore.
Indeed, broker N+1 Singer comments in its note this morning that given that it has only included firm orders for PrimeStore up until the end of this month, they remain confident further upgrades are likely for the rest of this year and into the next.
Speaking once more with CEO Julian Baines earlier this morning, there clearly remains much to warm to here and puts the business firmly on the front foot and in the spotlight going forward.
In terms of the numbers announced, revenues jumped to £26.33m up 23% which in turn saw adjusted EBITDA come in at £8.93m, representing a 60% uplift. Net profit increased 189% to £4.14m with cash generated from the operations moving to £6.94m against the corresponding period of £4.34m.
Baines sounded what is best described as cautiously optimistic which is perhaps a sound mantra as the CEO is clearly intent on delivering for shareholders and not over promising.
Clearly though, the business appears to be in a decent spot right now with much going on at present, as Baines expanded on a number of areas for me.
In relation to PrimeStore, he confirmed to me that aside working with Source Bioscience the recent announcement in relation to a £3m contract in the UK was with another Industrial partner.
Going on, he added that the testing picture is a changing one and that major companies were now opting to conduct their own testing on employees, hence that recent £3m win.
This would appear to offer further upside to EKF as more companies are likely to look at such an option and once adopted, is likely to continue to be around for some time.
Baines reiterated the view expressed in our previous conversation that testing is not likely to disappear anytime soon and whilst difficult to say precisely for how long, the next couple of years at least looks most likely.
It isn't merely the UK of course where PrimeStore is driving notable revenues as the main thrust has been in the US where the CEO confirms that Longhorns recently mentioned antigen test is different to the previously announced news, which sees EKF also manufacturing in bulk for that.
Baines says at this stage time will tell exactly what this will lead to, but suffice to say, he sees the company in a very good place.
Across Europe sales are also now set to come on stream with the pipeline filling up, particularly as the autumn and the winter months approach.
Although there are numerous companies and offerings within the testing space, Baines says that he isn't concerned, as there is such high demand that there is plenty of room where he sees the testing process increasing and increasing even should a vaccine arrive.
There is however much more to EKF of course than PrimeStore and he points out that they were delighted with the resilience demonstrated by the various parts of the business at a time of such difficulty.
For example, around haemoglobin the company undertakes a lot of business in Peru due to issues such as malnutrition, which as a result of Covid saw sales dry up for three months. Other areas such as India and Singapore were also hit, but these markets have since opened up and Baines says that September is looking like a very good month.
In today's announcement there was also a mention of the Quo Test (diabetes) anticipated being approved for the Chinese market, a region that it actually used to supply until regulatory changes were made by that country in 2016.
Baines says that they had to resubmit for the Chinese market which has been a long process, but that he is hopeful this will be concluded sooner rather than later and it could quickly see revenues of some £1.5m plus.
Within all the moving parts the CEO is very mindful of driving returns for shareholders and sounds a note of excitement on the opportunity that exists for its Trellus investment.
He believes it is an extremely positive way to utilise cash as demonstrated by the Renalytix returns and sees Trellus as having a bright future with a firm intention of bringing it to market next year, depending on the climate.
Trellus is focused on a massively underserved market in the US, that being inflammatory bowel disease including Crohns, where existing diagnosis and treatment is falling far short.
Baines says too often it is missed, misdiagnosed or treated with steroids, the latter of which serves to only mask the symptoms.
But, the real beauty of Trellus is that it can identify people most at risk early and which in the majority of cases commences at a young age.
Equally important from an investment perspective, it does not require moving through the FDA approval process as it is on a fully recognised pathway where in addition it boasts a world leading gastroenterologist at its forefront.
Baines believes Trellus has a great future and sees it in the same mould in relation to shareholders as that of Renalytix and he eyes further opportunities ahead via its relationship with Mount Sinai.
Although a 7% fall in EKF's share price this morning may be unwelcome, it would appear to offer a decent entry point to newcomers, or an opportunity for others to add to their position as the prospect of a further upgrade in the coming months looks likely.
With no sales for PrimeStore as yet included for this, or subsequent months from broker Singer, then further upside could prove sizeable, particularly in light of companies in the UK pursuing their own testing on employees.
Additionally, we have the Longhorn Antigen news which although something of an unknown, suggests further material upside given that EKF is already manufacturing.
For now, Singer sticks with full year revenues of £60m, adjusted EBITDA of £23m and adjusted Pre-Tax profits at £20.2m with EPS of 3.2p.
There is however more that underpins the story than a quick look at the figure and the PER of 16 though, which may imply that EKF is priced about right for now.
Whilst that number is quite likely to be revised upwards, there is also the extremely robust cash position, a range of products that will be increasingly in demand as markets continue to open up again with opportunities ahead from both existing and new partners across various regions.
Then there is the Renalytix investment worth north of £14m accompanied by the exciting prospect that exists within Trellus.
The impending dividend which in many cases would also make news, almost pales into insignificance here, but is nevertheless another positive that completes a positive picture in a company that appears to be going places.