Widening losses at Skyepharma (SKP) caught some investors off-guard, prompting an 8 per cent drop-off in the share price on the morning of the full-year results. But chief executive Peter Grant says there's been a "slight misunderstanding". The £10m loss (compared with a £1m loss a year ago) is the result of exceptional costs totalling £26m, which largely relate to a hefty one-off charge associated with last year's bond repayment.
Rewind to April 2014. Skyepharma sold £112m-worth of shares at 191p to settle its existing debts. While this appears to have hurt the bottom line come the financial year-end, pre-exceptional cash profits actually rose 46 per cent to £26m. It's also left the balance sheet in better shape: the group finished the year with £15m in the bank.
Mr Grant said that, for now, the board didn't feel "under pressure" to start making returns to shareholders. Instead, the money will be reinvested in the company's future product pipeline, with management upping the research and development (R&D) budget from £3.8m in 2014 to £10m this year.
Analysts at N+1Singer expect pre-tax profits of £22.5m this year, giving EPS of 17p, compared with £16.7m and 18.5p respectively in 2014.
| SKYEPHARMA (SKP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 300p | MARKET VALUE: | £314m | |
| TOUCH: | 296-304p | 12-MONTH HIGH: | 378p | LOW: 159p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 26p* | NET CASH: | £15m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 58.1 | 6.5 | 26.3 | nil |
| 2011 | 55.2 | -1.0 | -6.7 | nil |
| 2012 | 49.9 | -10.4 | -14.9 | nil |
| 2013 | 62.6 | -1.0 | 1.8 | nil |
| 2014 | 73.8 | -9.9 | -12.3 | nil |
| % change | +18 | - | - | - |
Ex-div: na Payment: na *Includes intangible assets of £6.1m, or 6p a share | ||||
