Oxford Nanopore shares jump on margin guidance

(Sharecast News) - Shares in Oxford Nanopore Technologies surged on Monday after the DNA and RNA analysis firm reported an acceleration in momentum towards the end of the year, pointing to higher-than-expected margins. The commercial performance picked up in the second half as expected, with underlying revenue growth 34% ahead of last year on a constant currency basis, but gross margins for the year are expected to be slightly above the 57% forecast.

Shares were up 21% at 158.5p by 0848 GMT.

ONT, which has developed nanopore-based sensing technology that is used for the analysis of DNA and RNA, said annual revenues for 2024 were £183m, up 11% on the year before, with underlying revenue growth of 23% at constant currencies.

The company said in a pre-close trading update that results were driven by expansion into customer end-markets outside of research, such as applied industrial, biopharma and clinical markets.

Excluded from underlying results was a £16m combined headwind from COVID sequencing and the Emirati Genome Program, which was slightly less than previously expected.

ONT reiterated its medium-term guidance for constant-currency revenue growth of 30% CAGR between 2024 and 2027, and a gross margin of more than 62% by 2027. It still expected to reach adjusted EBITDA breakeven in 2027 and become cash flow positive in 2028.

"Looking beyond 2025, our highly differentiated platform and deep innovation pipeline coupled with strengthened commercial and operational capabilities combined with a strong balance sheet, position us well to deliver long-term, sustainable, above-market growth," said chief executive Gordon Sanghera.