Aroa Biosurgery (ASX:ARX) share price up 14% on strong half

Two key updates in the one announcement for investors to enjoy today.

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The Aroa Biosurgery Ltd (ASX: ARX) share price is climbing in early trade this morning as the company released its preliminary half-year results.

At the time of writing, the surgical technology company's share price is up 14.81% from the market open and changing hands at $1.24 a share.

After a robust first half, Aroa also announced it had also signed a contract extension.

Here are the details on both advancements.

Aroa Biosurgery share price lifts on strong preliminary sales growth in first half

Aroa came out of the reporting period with a healthy set of results, with preliminary unaudited sales revenue of around NZ$17 million.

That represents an approximate 108% year on year growth when neutralising exchange rate effects.

After changes the company made to its sales team to drive more product turnover, the company claims to have grown its earnings substantially over the half-year.

On these two factors, Aroa updated its FY22 product sales guidance and now expects to be at the upper end of previous guidance of NZ$30 million to NZ$33 million.

Aroa will "further assess its FY22 product sales revenue guidance" once it confirms its H1 FY22 revenue, including "the quarterly revenue share from TELA Bio".

Aside from this progress, Aroa also announced it had signed a contract extension for its Myriad products.

The contract is to be rolled over with "leading US group purchasing organisation (PGO)" HealthTrusts Purchasing Group, L.P.

According to the company, approximately 1,500 US hospitals and healthcare systems will have access to its Myriad products as a result of the extension.

To cover the announcement in more detail, Aroa is holding an investor presentation today.

What did management say?

Speaking on the announcement, Aroa Biosurgery CEO Brian Ward said:

It is pleasing to see the momentum that is developing across the AROA product portfolio. The changes we made to our sales team [are] delivering on our expectations for Myriad Matrix, Myriad Morcells and Endoform™. We are also seeing growing demand from TELA Bio, Inc., AROA's sales and distribution partner for OviTex™ products.

Regarding the company's guidance figures, Ward went on to add:

Despite the constraints of COVID-19, the preliminary figures represent a strong revenue result for the half year, exceeding internal forecast expectations. Once unaudited revenue for H1 FY22 is confirmed and the outlook for COVID-19 becomes clearer, we intend to further assess our FY22 product sales revenue guidance.

Aroa Biosurgery share price snapshot

The Aroa Biosurgery share price has gained 16.5% in the past month, however, has had a difficult year to date.

It has only managed to climb 5.6% into the green during this time and is 5% in the red over the last year.

Both of these results have lagged the S&P/ASX 200 Index (ASX: XJO)'s return of around 25% in the past year.

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.

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