For immediate release
("NMR", the "Company", or, together with its subsidiaries, the "Group")
QUARTER 1 TRADING UPDATE FOR THE THREE MONTHS ENDED
§ Turnover for the quarter of
§ Revenues for testing of Johne's disease of
§ Year-on-year revenue increases also secured in Surveillance adjacencies and Genomics, 12.4% and 14.0% respectively
§ The overall milk recording revenue in this quarter is in line with projected forecasts following the impact of the RYUK cyber-attack and the spring Covid-19 lockdown
Andy Warne, Managing Director, commented:
"It is good to provide a trading update for the first quarter of our new financial year and to report that we are on track with the trajectory of our recovery from the first Covid-19 lockdown. The financial impact of customers switching milk recording services from an assisted service to a DIY model during the first Covid-19 lockdown was reported in the Annual Report. At its peak, approximately 950 customers made this switch, but our field staff have worked with our customers to reverse this trend with consequential benefits to turnover. In September, this number had reduced to 286, and we now have approximately 140 remaining on an altered service.
"Having been living with the pandemic for a number of months with various restrictions in place across the UK, we do not anticipate that the lockdown from 5 November to 2 December ("lockdown 2") will have a meaningful impact on our financial performance. NMR staff remain key workers, payment testing is a key component in the overall milk supply chain and our laboratories remain open, with appropriate Covid-19 procedures in place.
"Revenues for testing Johne's disease continue to grow, and we believe that the national scheme to focus on this disease, and accreditation for the Red Tractor system requiring Johne's management, will continue to drive increased testing and revenues.
"The quarter saw a slight fall in testing for Bovine Viral Diarrhoea ("BVD"). Testing for BVD represents a growth opportunity for NMR, but as yet, unlike similar schemes in Scotland and Ireland, there is no national scheme for BVD eradication in England and Wales. Instead management of this disease is boosted by local retailer projects and various veterinary programmes. A key enabler for a national scheme in England is an effective database of animals and the formation of
"Covid-19 testing for humans using PCR is operationally very similar to our own BVD testing for bovines. NMR is versatile and responsive however early in the pandemic we decided to remain focused on the development of our own strategic plan and did not pursue Covid-19 testing as an opportunity. I believe the emergence of large-scale laboratories operations such as GSK and Randox in the Covid-19 testing space vindicates this decision. However, we have not lost our ambition or appetite for a significant 'second engine' of development. Two key areas of investigation are further extension of our investment in genomics testing and the drive for quantitative measurement of sustainability factors in the dairy sector.
"I want to thank all the people who work at NMR, together with our long-established teams of self-employed milk recorders: They continue to maintain our operational readiness throughout the Covid-19 restrictions such that NMR has sustained an overall position of being open for business to ensure we are retaining levels of service for our customers."
Turnover for the third quarter was
The largest implementation for 2020 is the project to set-up Microsoft Dynamics365 for NMR. The scope of the project covers systems for finance and customer engagement, including corresponding control and reporting against the customer prospects pipeline and financial analysis across customer and product / service groupings. As well as replacing existing outdated systems, the benefits to the business in terms of flexibility, efficiency and analysis are substantial. Significantly, implementation also provides the opportunity to shift invoicing pattern to an in-arrears basis. The project timelines have been imp-acted by Covid-19 implications but are still expected to be delivered towards the end of the 2021 financial year.
Investment continues in NMR laboratories, with purchase orders raised in the first quarter for delivery of genomics testing equipment and the latest order for a laboratory milk analyser. Genomics equipment is expected to be physically delivered to the lab in
Funding to support these projects has been secured using the government-backed Coronavirus Business Interruption Loan Scheme, with those funds now in NMR accounts. Additionally, asset finance is agreed and ready to drawdown when corresponding planned asset purchases are made.
Amidst significant global uncertainties including US elections, Covid-19 restrictions and Brexit trade discussions, NMR expects a stable outlook in the medium term. Limited short-term milk supply chain challenges similar to those in the first Covid-19 lockdown may well be repeated as the country moves into lockdown 2, however NMR does not anticipate a significant adverse effect on revenues. The principal issue for NMR caused by Covid-19 is the distraction and lost opportunity to drive a more progressive agenda. Whilst the end of the Brexit transition period may cause short term issues, particularly in Northern Ireland, the Company anticipates that this remains mildly positive for NMR in the medium term.
A short webcast by John Allen from
For further information please contact:
Andy Warne, Managing Director firstname.lastname@example.org
Mark Frankcom, Finance Director email@example.com
Adam James +44-20-7523 8000
Blytheweigh (Financial PR)
Rachael Brooks +44-20-7138-3204
This announcement is available on the NMR website at www.nmr.co.uk
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014.
The Directors of the Company are responsible for the contents of this announcement.
NMR is the leading supplier of management information to the UK dairy supply chain. Through a team of self-employed milk-recorders, it collects and tests milk samples for approximately 50% of the UK's two million cows. In addition, its laboratories provide payment testing and disease testing services for Britain's milk processors. NMR has a joint-venture laboratory in the Republic of Ireland providing similar services to farmers and processors across the whole of Ireland. Another division of the Group is a livestock traceability business,
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