Melbourne-based developer and manufacturer of analytical and life sciences products Trajan Group (ASX: TRJ) expects its full-year revenue for FY24 to fall short of previous projections due to delays in order delivery and unexpected softening in the pharmaceutical sector.
Trajan manufactures analytical and life sciences products and devices—including microscope slides, analytical syringes and micro-sampling tools for blood analysis. These products and solutions are used to analyse biological, food, and environmental samples.
Trajan’s net revenue for FY24 is likely to range between $154 million and $157 million, falling short of the low end of its previously stated guidance of $163 million. The Company attributes this discrepancy to slower-than-expected order conversion and increased costs, resulting in delays in recognising revenue. Certain overdue orders are expected to carry over into FY25, impacting the full-year results.
The Capital Equipment segment has experienced a softening in demand, particularly in the pharmaceutical sector, due to timing and budget cycles. Although long-term demand and market share remain stable, current orders do not support the strong year-end revenue typically expected in this segment. This has had a negative impact on margins, made worse
This is expected to be corrected in May/June with the elevated output and further in FY25 as the cost structure normalises.
Trajan expects record revenue in the second half of FY24 for its Components and Consumables segment, thanks to stabilising demand. Microsampling demand is also expected to grow by about 30% compared to H1 FY24. Trajan has been ramping up global production to meet this growing demand, with output increasing by around 10% in recent months, but it has not yet reached the levels required to clear the growing order backlog.
Despite this growth, the projected revenue for the microsampling segment in H2 is expected to fall between $96 million and $98 million, below earlier forecasts. The microsampling-related component of Disruptive technologies is expected to break even in FY25. The cost reduction initiatives have already been actioned to achieve this objective, with the benefits to be realised from July 2024.
Trajan is also actively working with property agents in the US and Europe to pursue the divestment, and in some cases lease-back, of property assets acquired as part of more recent acquisitions. The objective is to unlock approximately $10 million within the next 12 months to be applied to debt reduction.
Trajan has been notified that US and Chinese patents for the “Hummingbird” miniature instrument system for real-time outcome measurement will be granted. The first unit of the latest version is now in assembly.
Recent feedback from some 25 Pharmaceutical companies has reinforced the merits of the concept and direction. In Australia, Hummingbird’s utility in field deployment for PFAS (a group of chemicals used in medical devices and fire-fighting equipment) measurement has been demonstrated.
Trajan continues to explore different business models and potential funding arrangements to accelerate commercialisation.
Alinda is a Business Reporter for The Sentiment
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1 Comment
Shraddha13
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