eResearch | In a few short months, ScreenPro Security Ltd. (CSE: SCRN) has emerged as a one-stop shop for Canadian COVID-19 testing and international travelers needing digital COVID-19 passport capabilities.
ScreenPro started off as a healthcare technology service company committed to providing fast, secure, and technologically advanced COVID-19 testing solutions to the private sector and governments.
In September 2020, ScreenPro started with its first partner lab in Vancouver, capable of processing 70,000 tests per month, and quickly expanded by partnering with a second lab in the Toronto region that was capable of performing over 40,000 tests per month.
ScreenPro targeted the film and TV production industry in Canada as they re-emerged from coronavirus lockdown and quickly signed up 22 production companies, including the largest streaming service company in the world.
After ramping up services with over 20,500 tests from October 2020 through January 2021, ScreenPro processed almost 50,000 tests in February between Toronto and Vancouver and recorded C$4.5 million in revenue in its first fiscal quarter.
The Company also reported delivering over 30,000 tests in March and 24,000 tests in April.
In its corporate presentation, ScreenPro forecasted revenue of C$6.2 million and net income of C$1.7 million in 2021 and revenue of C$16.3 million, and net income of C$4.5 million in 2022. With C$4.5 million already booked this year and another 54,000 tests completed in March and April, ScreenPro is on track to surpass this forecast by mid-year.
To help fuel growth and diversify its business into a full suite of pandemic management-related products and services, ScreenPro completed a Reverse Takeover (RTO) in March with Compel Capital and then acquired GoStop and Centred Venture, both share-based transactions.
Core COVID-19 Testing and PPE Services
ScreenPro provides turnkey COVID-19 screening solutions through its relationships with internationally-certified, coronavirus test kit manufacturers and its lab partnerships with Canvas Labs in Vancouver and Integrated Explorations in Ontario.
The Company plans to be a nationwide provider as it currently looks to expand its footprint with labs in Alberta and Montreal.
ScreenPro provides both COVID-19 molecular tests, often called polymerase chain reaction (PCR) tests, and antigen rapid test kits. The Company generates revenue of C$100 per PCR test with an approximate gross margin of 20-30%, and C$60 per Antigen test.
In addition to testing, ScreenPro also provides personal protective equipment (PPE) to ensure that its clients were protected in all facets of the testing process.
FIGURE 1: ScreenPro Investment Highlights
GoStop Acquisition
In March, ScreenPro acquired GoStop Inc., a digital COVID-19 passport company, for C$4.0 million in ScreenPro shares and warrants.
Based in British Columbia, Canada, GoStop offers a digital health passport that maintains patient medical details to enable workspace clearance and allows medical professionals to access key patient information for diagnoses and treatment.
ScreenPro plans to integrate GoStop into ScreenPro’s current reporting system with results from the COVID-19 testing delivered directly to the patient via the GoStop app.
Centred Ventures Acquisition
In May, ScreenPro announced that it entered into an agreement to acquire the assets of CENTRED Ventures, LLC, a US-based travel wellness medical technology company, for C$13.0 million in shares.
Centered acts as a conduit between travelers and wellness brands in approximately 200 cities worldwide, utilizing a vertically integrated platform consisting of a website, mobile app, e-commerce, physical locations, and loyalty program.
As Centred is already in a relationship with the UAE, whereby travelers have to upload evidence of their negative COVID-19 test before boarding a flight to the region, ScreenPro identified this massive opportunity to cross-sell its services and tests capabilities to Centred’s exiting city network.
ScreenPro will build upon its management team as Centered will operate as a wholly-owned subsidiary and Brian Chappon, current CEO of Centred, will be appointed as the president of this subsidiary.
Expanding Services
ScreenPro continued its plans to diversify its business into a full suite of pandemic-management related products and services by opening a COVID-19 testing walk-in clinic in Vancouver through a partnership with Concierge Medical Consultants.
ScreenPro has also started providing COVID-19 travel certificates for passengers traveling on Korean Air. The Company is targeting this testing service to other carriers and focusing on airlines flying to the United States, South Korea, the Caribbean, and the Middle East.
UK Opportunity
In March, ScreenPro, through its partnership with Enoura Medical in the United Kingdom, was approved by the National Health Service (NHS) in London, UK, and is now eligible to bid on NHS contracts.
To become a qualified supplier, ScreenPro and Enoura Medical’s products were “stringently reviewed” by the NHS and ScreenPro has been working with Enoura Medical for the last five months to receive approval.
Late last year, the Financial Times reported that the UK government was preparing to spend nearly £43 billion to deliver a massive COVID-19 testing vision, which aims to roll out rapid turnaround tests across the country.
ScreenPro reported that the NHS tender for the London area alone could reach £900 million (C$1.57 billion) over the next two years.
Final Thoughts
In a few short months, ScreenPro completed an RTO and over 125,000 COVID-19 tests, transacted on two M&A deals, initiated domestic and international service expansions, and booked C$4.5 million in revenue in its first fiscal quarter.
The Company is well underway in its plans to provide a full suite of pandemic management-related products and services for businesses to enact successful and safe return-to-work protocols and for travelers to comply with required testing.
With a billion-dollar market for its services but a Market Cap of only C$26.6 million, ScreenPro is a company to watch as workplaces reopen and travel ramps up.
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