Collagen Solutions warns of hit from contract delays

Collagen Solutions chief executive Stewart White

The Glasgow-based company, led by chief executive Stewart White, predicted it would deliver revenues of about £2.8 million for the year to 31 March – well below previous market expectations of £3.6m.

Underlying losses are set to come in at £750,000, compared with City forecasts of £602,000.

The firm, which develops collagen components for use in regenerative medicine and medical devices, last year said it was confident of building its valuation to £100 million within the next five years.

Collagen Solutions insists £100m value is in reach

But chairman David Evans today said the company has been affected by lower-than-predicted order volumes, customer delays and cancelled projects, adding up to an £800,000 hit to revenues.

He said: “Whilst I understand there will be a significant level of frustration with today’s announcement and whilst I share that sense of frustration, I am of the view that while the overall direction of travel is positive – we clearly need to move up a gear and fill the hopper with sufficient opportunities such that single customer delays do not have such a material impact upon the year-end out-turn.”

Evans added: “I remain very confident about the future based on the recent strengthening of our commercial team in the US and Europe and this will be strengthened further in Asia in this quarter. Additionally, our pipeline is the strongest it has been during my tenure as chairman. I am prepared to back this sense of confidence by increasing my holding in the company over the coming days.”

Shares in the firm fell sharply after the update, but Panmure Gordon analyst Mike Mitchell said: “Fundamentally, we believe Collagen is building a credible business underpinned by intellectual property and technical expertise, with a growing range of customers and opportunities.”