Six consecutive periods of >20% growth

TRX is focused on the development and commercialisation of two proprietary processing technologies for the repair of soft tissue (dCELL®) and bone (BioRinse®). It has a broad portfolio of products used in biosurgery, orthopaedics and dental markets. Investment in tissue processing, manufacturing capacity and strong commercial partners, together with its “4S” strategy, has generated six consecutive reporting periods of strong growth, with TRX turning EBITDA-positive in 2023. New growth in 2024 will deliver a fully profitable, cash-generative, group. The cash will be invested to expand capacity even further through Phase 2, starting in 2025.

• Strategy: TRX is building a global regenerative medicine business around its proprietary technology platforms, underpinned by compelling clinical outcomes. Phase 1 of its investment programme has grown sales to a point where TRX is cash-generative, which will be used to expand capacity further with Phase 2.
• 2023 results: Sales rose 20%, to $29.5m ($24.5m), with BioRinse (+25%) the main growth driver, supported by dCELL (+17%). Operating efficiencies and good cost control saw TRX become EBITDA-positive in 2023. Gross cash was above forecast at $4.65m, with flexibility provided by a $10m revolving debt facility.
• Outlook: Management will continue to build on its successful “4S” strategy to drive sales growth and sustainability. The US remains the main driver, but TRX is looking to expand its geographical reach further in 2024 through commercial distribution agreements, accelerating the profitability and cash generation.
• Risks: The long recovery from the pandemic appears to be over. TRX is carefully managing its supply chain and its ability to recruit staff has improved; however, with limited ability to raise prices, increased supply and labour costs must be offset by greater efficiencies. TRX has no need for a capital injection.
• Investment summary: 2023 was a milestone year when TRX was fully EDITDA-positive and cash-generative in 2H’23. Further anticipated growth in 2024 will see the group become EBIT-positive and generate additional cash, which will be used to expand processing and manufacturing further through Phase 2 of its investment programme in 2025. An EV/sales multiple of 4x 2025E sales generates a valuation of $158m/£125m.