Despite a challenging quarter, the Finance team is confident in continued growth for the business unit.
The Finance team recently completed their mid-year forecast, which indicates that LGC Clinical Diagnostics continues to be on track to deliver on the FY23 budget and produce year-over-year growth. This comes despite a dip in Q2 revenue caused by lower sales, partially driven by a decline in demand for COVID-19 products.
Following the overperformance in Q1, this Q2 dip was expected. Business unit revenue in Q2 was down 2.3 million versus budget, while base business was down 1.9 million. LGC CDx was down 1.1 million, as the effort to boost Multichem sales in the US through cross-selling with VALIDATE has progressed more slowly than expected. However, VALIDATE in general has been trending higher due to the relationship with Roche. Clinical PT and the Native Antigen Company overcame shipping issues to deliver revenue in line with plan.
Although Q2 is below budget, year-to-date performance continues to be strong. The overperformance in Q1 was enough to offset the lower Q2 performance, and the Finance team does not expect the issues that impacted Q2 to present continued obstacles. Lower operational expenses in Q2 have contributed to an overperformance in business unit EBITDA, despite inflation. Internal C-19 sales have also boosted EBITDA.
Internally, the team plans to implement improvements on the FY23 Strat Plan and FY24 Budget plan as well as on tracking and reporting processes. Implementation of Adaptive Insights for API budgeting and forecasting is also in progress.
