Polynovo (ASX:PNV) share price flat as revenue grows 32% in FY21

Polynovo shares are stalled after the medical devices company broke even in FY21.
The post Polynovo (ASX:PNV) share price flat as revenue grows 32% in FY21 appeared first on The Motley Fool Australia. –

The Polynovo Ltd (ASX: PNV) share price is languishing in early trade on Thursday as the medical devices company reported its FY21 earnings.

Let’s investigate further.

Polynovo share price stalls on strong revenue and on turning a profit

Here are the highlights of the company’s earnings report:

Total revenue increased 32% year on year to $29.3 million
Distributor sales also grew by 53% over the year
Gross margin increased by 3% from “manufacturing efficiency gains”
Corporate and overhead expenses also increased by 10% as the business expanded
Net profit after tax of $260,000 when adding back in non-cash items.
Achieved break even in FY21.

What happened in FY21 for Polynovo?

In a positive for the Polynovo share price, the company grew revenue and product sales by 32% and 34% respectively from the year prior.

As a result of “manufacturing efficiencies”, the company saw a 3% improvement in its FY21 gross margin, helping an operating profit of $400,000, up from a loss of $1.2 million the year prior.

Operating expenses increased by 26% year on year to $27.3 million as a reflection of the business expanding. As a result, corporate and overhead expenditures widened by 10% from this as well.

Polynovo also increased its staff headcount from 78 to 106, a 36% increase over the year. This helped to drive sales and also grew “employee-related expenses” by about 30%.

Consequently, the company reached its break-even point in FY21 and turned a net profit after tax (NPAT) of $260,000 and EBITDA of $635,000 which could weigh in on the Polynovo share price.

This was backed by a 55% year on year growth in research and development (R&D) to focus on key clinical trials.

Polynovo left the quarter with $7.7 million in cash on hand, flat on its half-year results, but down from $11.6 million in FY20. Although, there was “minimal cash burn from operations” at $250,000.

The company also commissioned its Unit 1 manufacturing facility to produce polymers, micro-spheres, foam cutting and a raft of other functions.

In addition, the company also obtained 99 new hospital customers and 7 new distributors that will be covering 9 markets.

What did management say?

Speaking on its FY21 performance, Polynovo’s directorship said:

Sales in all our direct markets continue to grow with the second half providing strong improvement in revenues, new account acquisitions and sales team expansion. Importantly PolyNovo achieved a small profit (excluding non-cash items) and was cash breakeven, a significant company milestone. Our cash on hand position is strong as at 30 June 2021 and forward cashflows are building despite forecast expenditure required for growing sales teams and investing in new product development.

What’s next for Polynovo?

Polynovo expects strong results in FY22 across all of its key markets, including the US, Europe, UK Middle East, Asia, Australia and New Zealand.

The company’s NovoSorb graft is expected to see sales growth in FY22, with “70% of burns centres now having purchased” the product.

Furthermore, Polynovo intends to exhibit “aggressive revenue growth” by further expanding its headcount and entering into new markets, particularly within the European Union.

Finally, the company will continue its key clinical trials throughout the coming periods in FY22.

Regarding its outlook, Polynovo’s directorship concluded “the business will continue to reinvest cash flows to expand market share in existing markets, enter new markets, and develop new products”.

The Polynovo share price is down 0.94% on the day and is in the red by 46% this year to date. This extends the loss over the last 12 months of about 3%.

These results have lagged the S&P/ASX 200 index (ASX: XJO)’s gain of around 25% over the last year.

The post Polynovo (ASX:PNV) share price flat as revenue grows 32% in FY21 appeared first on The Motley Fool Australia.

Should you invest $1,000 in Polynovo right now?

Before you consider Polynovo, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Polynovo wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

How did the Polynovo (ASX:PNV) share price respond last earnings season?
These are the 10 most shorted ASX shares

The Polynovo (ASX:PNV) share price is up 7% this month. Here’s why
These are the 10 most shorted ASX shares

The best and worst performing ASX 200 healthcare shares of 2021

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended POLYNOVO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!