Ergomed unveils promising set of interim results

22nd Sep 2023 10:47

(Sharecast News) - Pharmaceutical service provider Ergomed announced a promising set of interim results for the first half on Friday.

The AIM-traded firm reported a sustained growth trajectory for the company, underpinned by a solid performance and a favourable outlook for the remainder of the year.

It reported revenue of £76.7m for the six months ended 30 June, making for a 10% increase from the £69.9m recorded in the same period last year.

Adjusted EBITDA stood at £15.7m, reflecting growth of 14% compared to the first half of 2022.

Ergomed's order book boasted a robust value of £310m, showing a year-over-year growth of 9%.

Adjusting for foreign exchange fluctuations, the growth rate stood at 11%, providing an insight into the company's performance into the second half and beyond.

Further accentuating Ergomed's upward trajectory was the 30% surge in its new business pipeline over the first half, attributable to strategic commercial investments.

Diving deeper into the financials, the company's clinical research services (CRO) division reported revenue of £38m, up 11%, while the pharmacovigilance (PV) division recorded £38.7m in revenue, a 9% increase.

Gross profits reached £31.6m, showing a 9% rise from the first half of 2022's £28.9m.

Investors would be encouraged by Ergomed's healthy cash balance of £26m - a notable jump from £19.1m as of 31 December.

Additionally, the company remained debt-free, with available credit facilities of up to £80m.

In another significant development, shareholders were alerted to a recommended cash offer on 4 September.

Eden AcquisitionCo - a firm controlled by funds advised by Permira Advisers - proposed a cash offer of 1,350p for each Ergomed share.

In light of the positive figures and consistent growth, the company anticipated that its revenue and adjusted EBITDA for the year would meet market expectations.

"As announced in the trading update on 25 July, Ergomed has made a very solid start to the year, demonstrating continued growth and reflecting the global appeal of our offering to our clients, the strength of our business model and the resilience of the markets we address," said executive chairman Dr Miroslav Reljanović.

"We have continued to execute our strategy to transform the business by investing in technology and our commercial infrastructure and believe the potential of these investments is reflected in the robust year-over-year growth of our new business pipeline."

In addition, Dr Reljanović said the firm had maintained its focus on prudent cost management and executing its disciplined approach to mergers and acquisitions.

"We expect to deliver on our expectations for financial results for 2023, and we look forward with confidence to the rest of this year and beyond."

At 1021 BST, shares in Ergomed were down 0.44% at 1,350p.

Reporting by Josh White for Sharecast.com.