Trinity Biotech reports Q2 EPS (15.6c) vs. (28.6c) last year

Reports Q2 revenue $13.89M vs. $15.4M last year. The company said, “Management continues to be very focused on driving significant operational transformation and optimisation to improve cashflow and allow our key products to gain a cost competitive advantage in certain market segments. As the Company operates in a highly regulated healthcare sector, significant operational changes are typically subject to complex technical validation processes that can create time lags between initiation of the change process and final implementation & benefit realisation. In that context, many of the key operational transformation programs we initiated over the past 12-24 months are now starting to deliver significant benefits and are projected to deliver increased and recurring cashflow benefits while also allowing us to target growth in certain lower price markets, while maintaining our target margin. Some of the key operational transformation projects include: Ongoing Headcount Optimisation: In Q2 and Q3 2023, management accelerated headcount reductions as a result of: process simplification initiatives that have been ongoing for the past number of quarters, the implementation of new software tools in quality/regulatory compliance and production planning, and lower than expected revenues, particularly considering delays to the TrinScreen HIV roll out in Kenya. Excluding the impact of the disposal of Fitzgerald Industries and limited hiring to support TrinScreen HIV manufacturing, these changes are expected to deliver an approximately net 20% reduction in headcount by the end of Q4 2023 compared to Q1 2023, with a resultant annualised cashflow saving of over $4m. Overall, this would represent an over 35% reduction in headcount compared to Q4 2020 when we started this optimisation journey. The majority of these 2023 reductions are in back-office functions such as Finance, Quality Assurance/Regulatory, and Supply Chain, reflecting the impact of modernisation and simplification projects lead by the key senior functional leaders we have hired over the past few years. We expect the financial benefit of these reductions to make a meaningful impact from Q4 2023. To support TrinScreen HIV manufacturing we have hired approximately 15 additional staff….Management believes that the future profitability and growth of the Company is significantly dependent on optimising our cost competitiveness which makes these investments key to delivering significant returns over the medium term. We are prioritising investing in the delivery of recurring savings as they should deliver increased sustainable EBITDA and thus increased capital value within each of our core business areas.”