Eye on growth in revenue, broker says

Pacific Edge’s investors will be "keenly watching" its financial results for revenue growth, a Dunedin stockbroker says.

Tomorrow, the dual-listed Dunedin cancer diagnostics company will release its full-year results to March 31 to the market.

The company’s share price has languished over the past six months, falling from a 52-week high of $1.52 a share on the NZX to under 90c in the past month.

On the ASX, its share price has fallen from its listing price of $A1.60 in late September last year to a low of around A75c.

Craigs Investment Partners broker Peter McIntyre said investors would be watching its results for revenue growth.

At its half-year results in November last year, the company reported total revenue had increased 66% to $6.7 million.

The market would be keen to see that sort of growth continue, Mr McIntyre said.

As in the case of most companies affected by Covid-19, a strong revenue figure from Pacific Edge for the year would send a positive signal to the market.

Investors would also be looking at revenue from its large markets, such as in the United States with its client Kaiser Permanente and Northern Health in Australia.

"It’s all about growth for Pacific Edge," Mr McIntyre said.

Last year, the company completed an $80 million capital raise when it announced it would list on the ASX.

That meant the company should not have any problems around cash in hand or equity.

It was not just about net profit after tax for Pacific Edge; it was also about ensuring it kept boosting revenue, he said.

The company had done a lot of capital raises over the years and spent a lot on business development and marketing.

"Now investors will be looking at some rewards in revenue growth," Mr McIntyre said.

Forsyth Barr broker Suzanne Kinnaird said the results would likely show a continuation of recent trends with Covid-19 and the associated integration issues at Kaiser Permanente.

That could be drag on momentum regarding its results, she said.

Another key area investors would be watching was its recent commercial test volumes as Covid-19 pressures eased off.

There would also be a focus on broader strategic insights from new chief executive Peter Meintjes, particularly around balance sheet utilisation, Ms Kinnaird said.

Dr Meintjes told Pacific Edge investors in March the "sharp shift" in global sharemarket sentiment had affected Pacific Edge’s share price.

The company’s executive team and board believed Pacific Edge had to focus its efforts on what it could control, he said.

That was building long-term sustainable value in a rapidly growing business and making "prudent use" of the capital investors had entrusted Pacific Edge with, Dr Meintjes said.

Pacific Edge’s stock closed down 1% at 80c on the NZX and down 0.6% at A75c on the ASX yesterday.

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