Why the PolyNovo (ASX:PNV) share price is sinking 10% lower today

The PolyNovo Ltd (ASX:PNV) share price is sinking lower on Tuesday after the release of a trading update…

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The PolyNovo Ltd (ASX: PNV) share price is on the move on Tuesday following the release of a trading update.

In morning trade the medical device company's shares are down a disappointing 10% to $3.04.

What did PolyNovo announce?

PolyNovo's update revealed that the company delivered a 31% increase in sales over the prior corresponding period for the first half of FY 2021.

This was driven largely by a 75% increase in sales during the first quarter, which was offset slightly by slower than expected sales in October and November.

Pleasingly, this softness appears to have ended, with the company's December sales growing strongly and coming in ahead of expectations in the US, New Zealand, and Taiwan markets.

In respect to the key US market, PolyNovo's sales grew 41% during the first half. It is aiming to build on this in the second half with the help of recent appointments.

During the half, PolyNovo hired 12 experienced and dedicated Territory Managers and one sales director in the country. It also notes that it received more requests for proposal (RFP) in the last three months than in the previous nine months, signed two GPOs, and a number of large strategic hospitals.

Management commentary.

PolyNovo's Chairman, David Williams, revealed that COVID-19 had impacted its performance during the first half.

He said: "While we have experienced a few bumps from COVID-19, we have built a significant base of new customers which holds us in a strong position. We will continue to expand our customer base which will enhance our success as the pandemic eases."

The company's Managing Director, Paul Brennan, acknowledges that the near term will be volatile, but remains very positive on the long term.

He commented: "In the short-term forecasting sales will be challenging particularly in the US, however the medium-term outlook is strong, and we continue to see surgeons using and referring NovoSorb BTM to their peers. Once hospitals have more capacity, we will see US and UK sales accelerate just as we have seen in New Zealand and Australia. New geographies offer good opportunities for NovoSorb BTM."

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of POLYNOVO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Fallers

Shot of a young businesswoman looking stressed out while working in an office.
Share Fallers

Why 29Metals, CAR Group, DroneShield, and Santana Minerals shares are falling today

These shares are missing out on the good times on Thursday. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Imricor, Imugene, Newmont, and Pepper Money shares are falling today

These shares are having a tough time on hump day. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why Cromwell Property, Metcash, Pilbara Minerals, and Tyro shares are falling today

Let's see why these shares are under pressure on Tuesday.

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Block, Computershare, South32, and Strickland Metals shares are falling today

These shares are starting the week in the red. But why?

Read more »

Person with thumbs down and a red sad face poster covering the face.
Share Fallers

Why Imricor, Ora Banda, Ventia, and Vulcan shares are dropping today

These shares are ending the week in the red. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why CSL, Imricor, Jumbo, and Netwealth shares are falling today

These shares are under pressure on Thursday. But why?

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Share Fallers

Guess which ASX 200 stock is crashing 42% on big news

Big bad news is weighing heavily on this stock today.

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Why Beetaloo, Botanix, Cobram Estate, and Origin Energy shares are falling today

These shares are having a poor session on Tuesday. But why?

Read more »