Novacyt's Turnaround: From Consolidation to Growth
A Year of Delivering on Promises
Novacyt's full-year 2025 results (announced May 1, 2026) marked a turning point after two years of restructuring. Revenue reached GBP 20 million, growing 4% year-on-year excluding the Taiwan divestment, with a gross margin of 63% — helped by a robust Primer Design business that still operates above 80% gross margin. The EBITDA loss narrowed 14% to GBP 7.8 million, and management beat its own market expectations for the first time. The strategic plan, introduced in late 2025, focuses on reinvesting in R&D and streamlining operations; as CEO Lyn Rees put it: “we launched our strategic plan... putting some more money into R&D so we can get new product launches and more content for our customer” — Lyn Rees, CEO · 2026-05-01. That investment is already visible in the launch of the LightBench Discover instrument, which drove 20%+ growth in the instrumentation segment. In the core clinical business, NIPT technologies grew 10%, buoyed by contract wins in Iceland and Thailand and the St. George's University Hospital tender for the NHS, which secures the entire south of England's NIPT testing for the next two years.
The Southern Cross Acquisition: A Fast-Track to International Growth
The biggest catalyst is the acquisition of Southern Cross Diagnostics, completed March 2, 2026. Southern Cross is a tiny distributor (11 employees) but generates over GBP 6 million in revenue, tripling since 2023. Rees highlighted: “They're a relatively small organization, just 11 people with 1 founder director, but those 11 people generate north of GBP 6 million worth of revenue” — Lyn Rees, CEO · 2026-05-01. The deal includes an earn-out of up to AUD 16.5 million over four years, tied to cumulative EBITDA targets. The acquisition was funded through a preferential subscription rights (PSR) issue that was oversubscribed — more than half of the new shares went to Southern Cross' founder, aligning his interest with Novacyt's long-term success. Integration is ahead of schedule — 75% of tasks completed in 60% of the time — and the Australian team has already launched LightBench, generating over 50 leads at a genomics conference. This acquisition accelerates Novacyt's presence in a market where government reimbursement for molecular diagnostics is expanding rapidly, and it provides a platform for third-party product distribution across Australia and New Zealand.
Product Pipeline and the IVDR Moat
Novacyt is building a sustainable regulatory advantage through IVDR approval, which is becoming a barrier to entry. The upcoming launch of the new DPYD assay — a pharmacogenomic test that can save lives by identifying patients at risk of severe toxicity from 5-FU chemotherapy — is a key growth driver. Developed with key opinion leaders, it launches in RUO form this May, with IVDR approval expected shortly after. The company also plans to launch an RNA-capable version of LightBench later this year. This focus on approved, clinician-backed products contrasts with many competitors still selling unregulated research-use-only kits, a difference management believes will become more pronounced over the next 24 months as IVDR becomes mandatory across Europe.
Financial Discipline and the Path to Profitability
Cash management remains central. Novacyt closed 2025 with GBP 19 million, but the Southern Cross acquisition and associated costs brought the cash balance down to GBP 11 million by end of March 2026. CFO Steve Gibson confirmed: “we announced in the RNS today that we had GBP 11 million in the bank at the end of last month” — Steve Gibson, CFO · 2026-05-01. The monthly cash burn was around GBP 825,000 in 2025, but management expects this to decline as Southern Cross contributes and working capital unwinds. The company maintains a strong balance sheet with no debt, and capital allocation priorities are clear: invest in growth and reach EBITDA profitability, with cash burn reduction a key near-term goal. This echoes a long-standing stance — as Gibson said in May 2024, “we think we can reach breakeven mostly on to profitability without needing to raise additional capital” — Steve Gibson, Chief Financial Officer · 2024-05-30. The auditor's report flagged no material uncertainty, and while the French social accounts carry an emphasis of matter, it merely notes the adoption of a new chart of accounts.
Notably, while global markets are preoccupied with tariffs, Novacyt is largely insulated. As CFO Steve Gibson noted in May 2025, “the tariffs haven't had a material impact on our business at all” — Steve Gibson, Chief Financial Officer · 2025-05-02 — a rare point of stability in a volatile trade environment. The company's diversified geographic mix (Europe ~50%, Asia-Pac ~30%) further reduces country-specific risk.
I'm more excited about this business than I've ever been. The last 2 years have been hard, doing consolidation, shutting sites, making those decisions, understanding where the best place to invest in terms of new technology is.
With a strengthened product pipeline, a growing international footprint, and a clear path to profitability, Novacyt is positioning itself as a leaner, more focused diagnostics player. Management's guidance, via Singer Capital Markets, points to 2026 revenue of GBP 26.4 million — a 32% jump for the year. The next 12 months will be telling as the company aims for double-digit revenue growth and, eventually, its first sustained profit.