UPDATE: Sagentia Sees 1H Profit Well Ahead Of Market Views

5th Jul 2010 12:57

(Adds detail, analyst comment, share price.) By Hannah Benjamin Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Technology consulting firm Sagentia Group PLC (SAG.LN) Monday said its first-half profit is expected to "substantially" better market expectations, on the back of the company's restructuring last year and strong trading in the first half of the current year. Sagentia--which provides outsourced research and development consultancy services for the medical, consumer and industrial sectors--said its first half profit is expected to exceed market forecasts for the year as a whole. It didn't say what level of profit analysts had expected it to make over 2010, but according to FactSet Sagentia had been expected to make a full-year pretax profit of GBP500,000 on sales of GBP16 million. The performance in the first half to June 30 is in stark contrast to the company's result just a year earlier, when it made a half-year pretax loss of GBP1.9 million on the back of asset writedowns and a small loss at its core business. At that time the company was shouldering GBP4.8 million of net debt. But after a placing in May, which raised a net GBP7.7 million, and strong cash flow it had net funds of GBP6.6 million as at June 30. At 1147 GMT Sagentia's shares were trading 4 pence, or 11%, higher at 39 pence, outperforming a 0.2% fall in the Dow Jones Smaller Companies index. Arbuthnot Securities said it is upgrading its 2010 adjusted pretax profit estimate for Sagentia to GBP900,000 from GBP500,000, on sales of GBP16.5 million compared with GBP16 million previously. "We hope that we will see further progress in pretax profit and we expect to publish a research report detailing our forecasts for the next two years in due course," analysts Robert Sanders and Oliver Cummings told clients in a note Monday. They rate the stock "strong buy" with a 70 pence price target. Sagentia's interim results are due to be released towards the end of this month. -By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; [email protected] (END) Dow Jones Newswires July 05, 2010 07:57 ET (11:57 GMT)