Oxford Biomedica's (OXB) contract with Swiss behemoth Novartis (CH:NOVN) is changing the shape of the company. To meet its contractual obligations to manufacture batches of Novartis's CTL019 leukaemia drug, OXB is expanding its existing Harrow House manufacturing facility as well as opening a new site in Oxford. This should increase the group's production capacity around five-fold – a good job, too, since OXB's existing facilities ran at full capacity during the first six months of the year.
Including other operating income, OXB's top line grew to £5.8m, from £5.1m in the first half of last year. But a ramp-up in research and development spending and new staff costs forced the group to report widening losses. It is also spending in the region of £20m on the new manufacturing sites and upgrading its research laboratories in Oxford.
Chief financial officer Tim Watts said the first half was "an investment period" and that revenues would accelerate in the second half. But analysts at broker N+1 Singer are reviewing their forecasts amid concerns that the group will need a "significant pick-up" in activity to meet current estimates. Previously, the brokerage had hoped for revenues of more than £21m for the full year. Mr Watts says that figure is "top of the range" and that OXB is "focused on the long term rather than hitting financial forecasts this year" - a clear hint that the numbers may have to fall.
| OXFORD BIOMEDICA (OXB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 8.5p | MARKET VALUE: | £219m | |
| TOUCH: | 8.37-8.69p | 12-MONTH HIGH: | 13p | LOW: 3p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 0.7p | NET DEBT: | 3% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 4.7 | -5.6 | -0.32 | 0.0 |
| 2015 | 4.4 | -8.6 | -0.24 | 0.0 |
| % change | -7 | -53 | -25 | - |
Ex-div:n/a Payment:n/a | ||||
