Clinigen interim profits up, but shares fall sharply on broker downgrade

26th Feb 2014 13:05

Pharmaceuticals company Clinigen reported first half pre-tax profits of 9.6m pounds, up from 3.7m in 2012, but shares in the company were marked down sharply after a broker downgrade.Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 20% to £12.5m. Group revenue was flat at £61.8m, although there was a 6.5% rise in like-for-like sales during the period. Underlying earnings per share rose 7.8% to 9.7p.Broker Investec downgraded the stock to "sell" from "hold" with a target price of 560p, describing the results as "mixed with revenues and margins fluctuating materially within each business"."Overall, the key EBITDA metric is broadly in line with our estimate. We think the business is in good shape and looks interesting on a long-term view (of more than three years)," Investec said."However, we believe the current valuation offers little margin for error and suggest locking in some profits given that we see the shorter term upside as more than priced in."Clinigen Chief Executive Peter George said integration of the firm's Cardioxane and Vibativ drugs were going well with some commercial activities ahead of plan, and Foscavir sales levelling out as forecast."Acquisitions for speciality pharmaceuticals are a priority and our activity in this area is high; we are confident we will add further to our portfolio in 2014," George said."In summary, a good start to FY14, with full year expectations on track."The interim dividend was increased to 1p a share from 0.6p per share.Clinigen shares were down 112.5p to 527p at 13.03, a fall of 17%.FP