EKF Diagnostics H1 2026: Margins Rise as Second-Half Delivery Takes Centre Stage

EKF Diagnostics has reported broadly flat first-half revenue, but the more important parts of its latest update sit below the top line.

The AIM-listed diagnostics group improved its gross margin, grew adjusted EBITDA and increased its cash balance during the six months to 30 June 2026. Management also maintained its full-year expectations, supported by tender deliveries scheduled for the historically stronger second half.

For investors in EKF Diagnostics Holdings PLC, this is a reassuring update rather than a dramatic one. Revenue growth still needs to arrive during H2, but the group appears to be extracting more profit from its existing sales while retaining a debt-free balance sheet.

EKF Diagnostics' H1 2026 key figures

Metric	H1 2026	Comparative figure	Change
Revenue	£25.0 million	£25.2 million	Down approximately 0.8%
Gross margin	53%	50%	Up 3 percentage points
Cash balance	£16.0 million	£15.8 million at 31 December 2025	Up £0.2 million
Cash held in Russia	£2.4 million	£2.1 million at 31 December 2025	Up £0.3 million
Bank borrowings	None	Not disclosed	Not applicable
Beta-hydroxybutyrate revenue growth	4%	Not disclosed	Ahead of first-half expectations
Life Sciences growth	20%	Not disclosed	High growth continued

Adjusted EBITDA increased during the period, although EKF did not disclose the H1 2026 figure in this trading update. Adjusted EBITDA means earnings before interest, tax, depreciation and amortisation, excluding exceptional items. It is commonly used to assess underlying operating performance.

Investors can read the original company announcement for the complete regulatory wording.

Flat revenue, but better-quality earnings

Revenue slipped from £25.2 million to £25.0 million, which is broadly flat and consistent with management's expectations. On its own, that would not be particularly exciting.

However, gross margin rose from 50% to 53%. This three-percentage-point improvement suggests EKF retained more gross profit from each pound of revenue, even before the expected second-half sales weighting arrived.

The accompanying growth in adjusted EBITDA reinforces that point. The absolute EBITDA figure was not disclosed, so investors cannot yet assess the precise rate of growth or conversion into operating profit. That detail should become available when EKF publishes its unaudited interim results on 15 September 2026.

For now, the direction is positive. Maintaining revenue while lifting both gross margin and adjusted EBITDA indicates improved underlying earnings quality.

Why the second half matters

EKF said Diabetes and Hematology delivered steady performances during H1. The majority of high-volume tenders have already been won, with delivery scheduled for the historically stronger second half.

That provides some visibility, but it also places greater weight on execution during the remainder of the year.

Management's understanding of current market expectations is for full-year revenue of £54.7 million and adjusted EBITDA of £13.6 million. With £25.0 million of revenue reported in H1, EKF would need to generate approximately £29.7 million in H2 to meet that revenue expectation.

That would make second-half revenue around 18.8% higher than the first-half result. This is not necessarily inconsistent with the company's normal trading pattern, particularly given the scheduled tender deliveries, but it is the central number to watch.

Investors will want evidence that orders convert into recognised revenue on time and that the improved margin is maintained as volumes rise.

Life Sciences is providing the growth

The strongest divisional performance came from Life Sciences, where revenue grew by 20%. EKF highlighted Contract Manufacturing as performing particularly well during the first half.

This matters because Diabetes and Hematology were described as steady rather than growing. Life Sciences is therefore carrying more of the group's near-term growth momentum.

Beta-hydroxybutyrate, or β-HB, revenue increased by 4% and exceeded management's first-half expectations. β-HB testing is associated with measuring ketone levels, although EKF did not provide a revenue figure for the product area.

The update offers no detailed divisional sales or margin breakdown, so investors cannot yet judge how much each business contributed to the improvement in group profitability. September's interim results should provide a clearer picture.

EKF is also continuing its strategic development work. The company previously announced the acquisition of Beep Insights technology, while this update confirms continued investment under its five-year plan.

Cash generation remains a clear strength

EKF ended June with £16.0 million in cash, compared with £15.8 million at the end of December 2025. It also had no bank borrowings.

That modest increase came despite investment for growth and spending under the ongoing share buyback programme. The company allocated £1.4 million to the programme, with £0.9 million deployed during H1.

A debt-free position and continued cash generation give management room to fund strategic investment and repurchase shares without relying on bank financing. That flexibility is one of the clearest positives in the announcement.

There is an important qualification. The cash balance included £2.4 million held in Russia, up from £2.1 million at the end of 2025. That represents 15% of reported group cash. The announcement does not explain whether this money can be transferred or used freely elsewhere in the group, so investors should avoid treating every pound of the headline balance as equally accessible.

Positives and risks for EKF shareholders

What looks encouraging

• Gross margin improved materially from 50% to 53%.
• Adjusted EBITDA continued to grow despite broadly flat revenue.
• Life Sciences delivered 20% growth, led by strong Contract Manufacturing performance.
• β-HB revenue grew by 4%, ahead of first-half expectations.
• EKF remained cash-generative and had no bank borrowings.
• Management maintained its full-year revenue and adjusted EBITDA expectations.

What needs watching

• First-half revenue declined slightly rather than growing.
• Meeting the £54.7 million full-year revenue expectation requires a meaningful H2 step-up.
• The value and timing of the high-volume tender deliveries were not disclosed.
• EKF did not provide an H1 adjusted EBITDA figure.
• £2.4 million of cash was held in Russia, with accessibility not disclosed.
• Detailed divisional profitability and cash-flow figures will not be available until the interim results.

September's results should fill in the gaps

EKF's H1 update shows a business improving profitability and preserving balance-sheet strength while waiting for a heavier second-half sales contribution.

The 53% gross margin, EBITDA growth and £16.0 million cash balance are all constructive. The test now is whether scheduled tender deliveries can lift H2 revenue to the level required by the full-year outlook without giving back the margin progress already achieved.

The interim results on 15 September 2026 should provide the missing adjusted EBITDA figure, more detail on divisional trading and a fuller view of cash generation. Those numbers will determine whether this first-half improvement is developing into stronger, sustainable full-year growth.