Clinigen beats forecasts with profits growth across group

25th Sep 2013 10:41

Grabbing increased market share in clinical trial services helped power drugs and trial services provider Clinigen to impressive first full year results. The AIM company, which floated in September last year, lifted profits before tax and one-off costs 29% to £20.4m on revenues up 49% to £1226.m in the year to end-June.Cash generation was strong, with £18.8m flowing from the business and net £6.6m of funds raised by the company from its initial public offer (IPO).Chief Executive Officer Peter George said the results had over-delivered on management's IPO promises and, in turn, the AIM listing had lived up to expectations. "It has provided a stronger platform from which to drive our organic growth, both in the UK and internationally, as well as giving us additional financial flexibility to support our acquisition plans and the acceleration of our international growth strategy." He said the IPO funds had enabled greater investment in infrastructure and recruitment of quality new staff.The core CTS division, which supplies clinical trial drug supply services, secured key deals with AstraZeneca and Accord, and lifted sales 49% to £87.8m and gross profits 14% to £11.4m. The highly profitable speciality pharmaceuticals (SP) segment, which buys and reformulates niche hospital drugs, increased sales 12% to £24.3m and gross profit 8% to £19.8m.The newer Global Access Programs (GAP) division, which organises patient programmes for drugs testing, grew revenues and profits more than fivefold from a much smaller base to £10.5m and £3.9m. "Our ambition for the next financial year is to maintain this momentum across all three operating businesses, principally organic growth for CTS and GAP, and through further acquisition of products for SP," said George. "Geographically, we are focusing our attention on the US, Latin America and Asia." He added that the group had made an "encouraging" start to the current financial year, with revenues in the two months to the end of August in line with expectations and continuing in the coming 12 months.Analyst Nicholas Keher at Investec said the preliminary results came in ahead of his and consensus expectations in spite of 10% upgrades only two months ago, and was most impressed with the GAP division profits growth. "With the run rate at over £1m per month for this division we continue to see real momentum for Clinigen against its competitors."Looking forward, he said the group's ability to keep capturing market share from competitors ahead of expectations would be likely to result in increased earnings estimates. "The CEO's statement reads bullishly and the company is looking to maintain the current organic momentum within the business as well as acquire 5-7 new products over a five year period. "We don't capture the upside of potential acquisitions in our forecasts, but, with a strong balance sheet, we see the prospects of further upgrades from inorganic growth over time."Shares in Clinigen were up 6.7% to 430p at 10:42 on Wednesday. OH