Shares in MyHealthChecked (LON:MHC), the at-home PCR test company, were on the climb last week. Although nowhere near their 52-week highs (7.45GBX in April) the share price was up 40% from the week before to just under 3.00GBX. This week we’ve seen the share price slip back down to around 2.57 GBX. The pullback comes despite the news that in the UK, PCR tests are now mandatory for overseas travellers.
Cardiff-based MHC started life as Concepta PLC which manufactured the myLotus fertility tracker (MYLO). However, in December 2020 it changed its name to MyHealthChecked, took a step back from the myLotus fertility tracker, bought The Genome Store (TGS) – a provider of home-administered postal DNA wellness tests – and launched a Covid-19 testing service.
PCR tests a boon for revenue
By early 2021, MHC became a certified government provider and Covid tests started flying off the shelves.Then in April 2021 MHC secured a contract with Boots UK to supply Day 2/Day 8, general and fit-to-fly Covid-19 PCR testing, both in-store and online.
The company also signed a commercial agreement with AAH Pharmaceuticals (Lloyds Pharmacy) for the supply of Covid-19 PCR test kits and associated laboratory services.
MHC revenue for H1 2021 was £3.2 million compared to £12,000 in H1 2020 and at the announcement in June the Board also reported that MHC had achieved their Q3 target revenue of £8.55 million.
Forecast profit for 2021
In terms of turning a profit, MHC was almost there by H1 2021. The half year results showed that MHC had reduced its loss from £1.1m for the same period in 2020 to just under £200,000. By the end of H1 2021, the company had £2.2m in cash (allowing for the H1 2021 loss as well as investing in inventory) thanks to a fundraising of £3.4 million in February 2021. MHC stated in June that its Q3 EBITDA profit for the quarter should be no less than £1.4m.
Right place, right time
MHC has recently invested in a laboratory in the Manchester Science Park including its own laboratory information management system (LIMS). The lab can offer COVID-19 testing services to customers including same day turnaround. It also has a retail presence under the MyHealthChecked brand and in September it was granted the ISO 15189:2012 stage 3 accreditation.
Added to this is MHC’s launch last week of a rapid antigen test and verification service and last week’s precautionary measures issued by the government on testing, all of which should mean that sales of Covid testing products will continue their upward trend well into 2022.
And the downsides?
However, while the Board believes that their range of Covid testing products will continue to provide revenue for some time, we are mindful of the fact that the current agreement with Boots is due to end on 5 April 2022. Not only that, apart from Covid 19 testing kits, the company has no other products for sale. MHC is developing a range of home testing kits following the acquisition in June 2021 of Nell Health, a technology platform that analyses DNA relating to nutrition, weight management, heart health and blood glucose, but there is no news yet of any product launches.
