PolyNovo Limited

PolyNovo reported first-half FY '26 group sales of $68.2 million, up 26% year on year, or $14.1 million of growth. U.S. sales were $51.7 million, up 25.3%, and rest-of-world sales were $16.5 million, up 28.3%. Adjusted EBITDA was $4.7 million, up 82% on the prior period. Gross margin was 88.8% for the half, reduced by a $3.7 million unfavorable manufacturing variance tied to temporary output reduction; management said gross margin should return to above 90% for full-year FY '26. Cash on hand was $29.2 million, operating cash flow was $9 million, and CapEx payments were $10.8 million, with $2.2 million remaining for the new facility. Management did not provide formal revenue guidance, but said H2 should be stronger, manufacturing output has already ramped up, and the business should generate free cash flow in the second half.

Bruce Peatey said his focus is on disciplined execution, building a high-performing leadership team, and sharpening the strategy rather than changing it. He emphasized expanding beyond burns into plastics, reconstruction, and trauma, while also pushing outpatient SynPath, the PMA submission, and broader international growth. His tone was constructive and confident, but he repeatedly framed many initiatives as still early and execution-dependent.

Jan-Marcel Gielen focused on the financial momentum and the temporary factors weighing on the half. He pointed to 95 new U.S. hospital accounts, MTX sales of $6 million in the U.S. up 193%, and strong cash conversion, including $9 million of operating cash flow versus a $12.5 million outflow in the prior period. He explained that the $3.7 million manufacturing variance and 88.8% gross margin were timing-driven because the company deliberately slowed output to prepare for PMA and FDA audit work, and he expects the full-year gross margin to be above 90% with free cash flow in H2.

Analysts focused on the softer U.S. quarter within the half, growth in BTM versus MTX, the capacity of the new factory, the outpatient/CMS opportunity, and whether the stock’s weak performance reflected insufficient growth. Management said November was softer because of fewer large burn cases and Thanksgiving, but December recovered, and they remain bullish on BTM while MTX is expanding use rather than cannibalizing it. On outpatient, management said SynPath can already be sold in some settings, with outpatient revenue treated as upside for now; on the PMA, they expect a standard FDA review, and on the factory they said it adds about 5x previous capacity.