BTG H1 results broadly in-line, sees larger end-market potential

12th Nov 2013 11:10

- H1 revenues in line with consensus forecasts- EPS up 21 per cent to 6.8p- Guidance for Varisolve raisedHealthcare group BTG drove first half revenues higher against tough comparators, as recent acquisitions made immediate contributions. The FTSE 250 group lifted underlying revenues 17% to £139m, with reported turnover up 7% to £153m, helped by strong licensing and biotechnology and interventional medicine sales, together with £13.3m input from the acquisitions of liver cancer treatment business TheraSphere and blood clot focused EKOS since their completion in July 2013.However, the cost of acquisitions, plus a different royalty mix and preparations for the launch of varicose veins treatment Varisolve dented operating profits slightly, with a 4.5% decrease to £25m.However, profit before tax jumped 18% to £32.7m, ahead of some expectations, with basic earnings per share 21% higher at 6.8p.Chief Executive Officer Louise Makin stressed that it was a strong performance during what was a transformational period for the business. "The acquisitions of TheraSphere and EKOS, together with our developing Beads business and advancing [Varisolve] opportunity, provide a powerful platform to deliver significant, sustainable and profitable growth. "We are firmly on track to create a world leader in interventional medicine and to continue to deliver significant value to our shareholders."The company increased its "vision" for Varisolve to "a $500m-plus global business", primarily by expanding treatment to cosmetic veins and to other geographic markets, from "£500m" previously. Broker Investec thought these long-term expectations for Varisolve were low. "Given the patient numbers in the US, we think the market potential will be higher, driven by increased penetration." Investec noted that BTG outlined increasing end-market potential for nearly all its products, which analyst Nicholas Keher thinks will lead to consensus forecast upgrades on a three- to five-year view."We think the outperformance will lead to 3%-5% revenue and EPS upgrades in full year 2014 and we place our forecasts under review. However, our outer year revenue forecasts will rise by more due to new product guidance."Shares in BTG were up 4.5% to 443.4p at 11:50 on Tuesday.OH