Point of care diagnostics specialist EKF Diagnostics has announced that its first-half results align with management forecasts, keeping the company on course for an improved second half of 2026. The Penarth-based firm also disclosed that its cash holdings in Russia have increased, now standing at £2.4m.
In a trading statement released to the Alternative Investment Market, EKF reported first-half revenues of £25m, broadly flat compared to the £25.2m recorded in the same period last year. The company attributed the slight decline to the seasonal weighting of sales, which typically see stronger performance in the second half of the year. Gross margin improved significantly to 53%, up from 50% in H1 2025, and adjusted EBITDA continued its upward trajectory, demonstrating operational efficiency gains.
First-Half Financial Performance
The group's cash balance as of 30 June 2026 was £16m, compared to £15.8m at the end of 2025. This includes £2.4m held in Russia, an increase from £2.1m at the end of last year. EKF operates in Russia through its German-based subsidiary, in which it holds a 60% stake, selling non-sanctioned medical devices. Since Russia's invasion of Ukraine, strict capital controls have limited the repatriation of profits, allowing the subsidiary to release only around £500,000 per annum in dividend payments over the last two years. The rise in Russian cash holdings has been partly driven by favourable exchange rate movements.
Russian Cash Escalates Amid Currency Shifts
EKF has no bank borrowings and maintains a strong balance sheet. The closing cash balance reflects the allocation of £1.4m for the company's ongoing share buyback programme, of which £900,000 was deployed during the first half. The remaining funds are being used to support continued investment for growth as part of the five-year strategic development plan. Management confirmed that the strategy remains on track, with steady performances from diabetes and haematology product lines. The majority of high-volume tenders have already been won and are scheduled for delivery in the historically stronger second half of the year.
The company stated: "The progress of the five-year strategy continues in line with management expectations. Diabetes and haematology delivered steady performances in the first half, with the majority of high-volume tenders already won and scheduled to be delivered in the historically stronger second half year."
Analyst Reactions and Market Outlook
Following the trading statement, analysts at Singer, Stifel, and Panmure Liberum all maintained their 'buy' recommendations. Panmure Liberum set a price target of 34p, while Singer and Stifel have slightly higher targets of 35p. In a research note, Panmure Liberum commented: "The shares are still cheap, and remain range bound with the buy-back providing a floor to the price. There is little in the statement to change this prior to the interims. However, the longer-term outlook remains more encouraging and we expect the growth rate to improve, margins to continue to expand and strong cash conversion. We retain our buy."
Despite the positive outlook, EKF's shares edged down slightly following the announcement, trading around 25p. The company reiterated that it remains on track to deliver revenue and adjusted EBITDA growth for the full year 2026 in line with current market expectations. With improving margins, a disciplined capital allocation strategy, and a robust pipeline, EKF Diagnostics appears well-positioned for a stronger finish to the year.
