(Alliance News) - EKF Diagnostics Holdings PLC on Monday said it anticipates its 2022 earnings will be below market expectations as it shifts its focus away from Covid-19, while it also announced that its chief executive officer and chair are stepping down from their roles.

The Cardiff-based diagnostics and central laboratory assay maker said CEO Mike Salter will give his post but remain part of the company's management team. Chair Christopher Mills also steps down from his role but remains as a non-executive director.

To lead the company in while it searches for a new CEO, EKF has promoted Deputy Chair Julian Baines to executive chair, effective immediately.

To focus on the new role at EKF, Baines will step down as chair and from the board of New York-based digital health platform provider Trellus Health PLC, which on Monday said it has appointed Senior Independent Director Daniel Mahony as non-executive chair with immediate effect.

Noting anticipated results for 2022 which it plans to release in late March, EKF said "the transition to non-Covid revenues in both contract manufacturing and laboratory testing is progressing, but is taking longer than originally anticipated."

EKF Diagnostics expects adjusted earnings before interest, tax, depreciation and amortisation to be slightly below market expectations due to underperformance in contract manufacturing and laboratory testing. Group cash excluding net borrowings as at December 31 was 42% lower at GBP11.4 million from GBP19.6 million a year prior. The lower cash reflected "planned investments made during the year, including the significant capital expenditure to increase the company's enzyme fermentation capacity in the US," EKF said.

Meanwhile, EKF noted that its cash in Russia as at December 31 jumped 85% to GBP2.4 million from GBP1.3 million a year ago, as international sanctions against Russia following its invasion of Ukraine mean EKF cannot pay cash dividends from its 60%-owned subsidiary there.

For 2022, EKF noted that it "will recognise large exceptional costs, but this will lead to stronger and clearer foundations for 2023."

Looking ahead, EKF said it expects to benefit from cost reduction in 2023 amid restructuring and operational efficiency measures being implemented.

EKF Diagnostics shares were 18% lower at 32.23 pence each in London on Monday morning, while Trellus Health shares fell 5.9% to 8.00p each.

By Tom Budszus, Alliance News reporter

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