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Sinclair IS weighs its options

Sinclair IS Pharma (SPH) is reviewing a number of options to transform the group's future
February 17, 2015

Bosses at Sinclair IS Pharma (SPH) have said selling "all or part" of the company is still a possibility this year. Reporting interim results to 31 December, the board confirmed the offer period (started on 25 November 2014) would continue until a suitable "form of co-operation" is found. This could take various forms: a formal merger or acquisition, or a licensing deal or product development partnership.

IC TIP: Hold at 32p

The company makes dermatology products and has paid close attention to growing its 'aesthetic' brands. These products - Perfectha, Ellansé and Silhouette - now represent 43 per cent of group revenues and helped drive a 200 per cent leap in cash profits to £3.3m during the first half. But Silhouette - a brand bought by Sinclair for £70m last year - hasn't had its products approved by regulators in Russia, a very important market for Sinclair. What's more, the political environment in Russia and the devaluation of the rouble could hold back sales growth in the international business in the second-half. A weak euro won't help either. Management estimates two-thirds of revenues will be "euro-dominated" this year. At present, Sinclair generates 45 per cent of group sales abroad.

Analysts at N+1 Singer expect adjusted pre-tax profits of £10.8m this year, giving EPS of 2p. This is up from £7m and 1.4p, respectively.

SINCLAIR IS PHARMA (SPH)
ORD PRICE:32pMARKET VALUE:£158m
TOUCH:32-33p12-MONTH HIGH:39pLOW: 24p
DIVIDEND YIELD:NILPE RATIO:NA
NET ASSET VALUE:22p*NET DEBT:40%

Half-year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201324.5-2.5-0.5nil
201432.0-10.8-2.1nil
% change+31---

Ex-div:na

Payment:na

*Includes intangible assets of £246m or 50p a share