Testing and decontamination specialist Bioquell saw its half-year performance hit by the loss of a defence contract. While the shares - which have risen nearly 30 per cent in the past year and now trade at broker Investec's 131p-a-share sum-of-the parts valuation - are looking up with events.
Although Bioquell has been investing in its future - the group has more than doubled its manufacturing facilities, which should support both product launches and bolster the group's recurring revenues. But the lost defence contract forced revenue at the bio-decontamination side to slide 11 per cent year on year to £11.9m, while the group's order book fell £3m to £20.9m.
Chairman Nigel Keen admits that defence contracts can be "lumpy" and the group is making progress towards reducing exposure to this area. In fact, total group revenue - after stripping out defence-related business - grew 9 per cent to £18.9m, helped by growth at the testing division, where revenues rose 12 per cent to £7.4m.
With sluggish defence conditions, Investec has cut full-year estimates by about 6 per cent and expects pre-tax profit of £5.2m, giving EPS of 8p (£5m and 8.2p for 2011).
BIOQUELL (BQE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 131p | MARKET VALUE: | £54.8m | |
| TOUCH: | 127-134p | 12-MONTH HIGH: | 141p | LOW: 99p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 66p* | NET CASH: | £2.3m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 20.0 | 1.98 | 3.50 | nil |
| 2012 | 19.3 | 1.47 | 2.70 | nil |
| % change | -4 | -26 | -23 | - |
*Includes intangible assets of £10m, or 26p a share | ||||
