The Polynovo Ltd (ASX: PNV) share price has been among the worst performers on the S&P/ASX 200 Index (ASX: XJO) on Wednesday following the release of its full year results for FY 2020.
In afternoon trade the dermal regeneration solutions-focused medical device company's shares are down 8.5% to $2.16.
How did PolyNovo perform in FY 2020?
PolyNovo had a very positive 12 months and delivered strong NovoSorb BTM sales growth in FY 2020.
For the 12 months ended 30 June 2020, the company sales revenue grew 104% to $19.1 million.
This was driven by strong growth in all markets, but particularly in the United States. The company's US business delivered a record quarterly sales result in the March quarter and then followed it up with a 36% increase in sales compared to the prior corresponding period during the June quarter.
Management notes that it is building a solid revenue base in trauma, reconstructive surgery, hand surgery, necrotising fasciitis, and general surgery. Its Burn sales are also strong, with significant account penetration in accredited burn centres in all regions
However, also growing strongly during the year was the company's operating expenses. They increased 28.4% year on year to $22.6 million.
As a result, the company posted an operating loss of $1.1 million, down from FY 2019's operating loss of $2.8 million. And on the bottom line, it reported a net loss after tax of $4.2 million. While this compares unfavourably to a net loss of $3.2 million a year earlier, it includes $2.06 million in share-based payments.
In respect to cash flow, PolyNovo reported a net cash outflow from operations of $0.4 million, leaving it with a cash balance of $11.6 million.
Outlook.
Management notes that there has been no material impact on its business from the COVID-19 pandemic. It revealed that its global digital marketing program is proving effective and sales continue to grow.
And while no guidance was given for the year ahead, management revealed that its fourth quarter sales came in at $5.99 million. This means PolyNovo starts FY 2021 with a sales run rate of $24 million, which already implies annual growth of almost 26%.
It also advised that it plans to reinvest its cashflows back into the business. It aims to use the funds to enter new markets, expand its market share, and develop new products.
