The CleanSpace (ASX: CSX) share price is tumbling 8% lower after the respirator maker announced half-year results this morning.
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The company released its half-year results for the period ending 31 December 2020 this morning. At the time of writing, the CleanSpace share price is trading hands at $6.79 a share, down 8.82%.
Results boosted by COVID-19 demand
There are not too many industries that directly benefitted from the situation fostered by COVID-19. However, respirators would certainly be one of them. Given the respiratory nature of the virus, masks and respirators have been used widely to combat the spread. In the healthcare space, it has been essential in abating the risk to frontline workers.
Hence, it comes as no surprise that CleanSpace’s revenue increased by more than fivefold compared to 1H FY20. The top-line result of $39.7 million was comprised of 50% US sales, 17% EMEA sales, and 33% Asia Pacific sales. The healthcare industry really outshone the industrials segment during the half, with 78% of total revenue.
The high proportion of healthcare sales combined with high accessory sales aided in lifting the company’s gross margin to 78%. Consequently, CleanSpace’s net profit after tax nearly doubled to $13.7 million for the half.
Wary of a drop-off
Although the company outlines the possibility of a prolonged way of living with the virus, there is also looming uncertainty. As stated in the CleanSpace presentation, “There are clear signs the pandemic has shifted to a closing phase, and it is expected that 2H will be lower than 1H.”
The company currently has 2 operational manufacturing facilities between St Leonards and Artarmon in New South Wales. Clearspace detailed its intentions to consolidate to one location to capture increased efficiencies as the virus risks taper off.
CleanSpace share price recap
CleanSpace listed on the ASX last year on 22 October. Since then, the share price has been floundering around between $5.60 and $7.50 per share. Despite the tailwind of COVID-19, the CleanSpace share price is down 8.5% since its listing.
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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia has recommended CleanSpace Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.