As sales accelerate and losses escalate, financials from companies such as Horizon Discovery (HZD) can be confusing. But seeing revenue more than double during the six months to the end of June will have pleased investors. Product revenue jumped 73 per cent to £3m thanks to a strong performance from acquired biotech business Haplogen Genomics, while service revenue tripled to £5.4m, reflecting the integration of two more acquisitions: research outfit Sage Labs, and CombinatoRx, which powers Horizon's screening for combination therapies.
The company is clearly still in growth mode as operating costs more than doubled to £10.6m, leading to operating losses of £6.7m. But investors should take heart from two recent high-profile deals struck by the company post period-end. The first - a licence and supply deal with Aim-traded Abcam (ABC) - should net the company £660,000 in exclusivity payments and a further £1.3m in four to six years' time. The second, a new cancer research collaboration with Redx Pharma, should also bring in future royalty payments as well as one-off payments, dependent on clinical successes.
The company ended the period with more than £30m in cash after topping up the bank balance by £25m with a fundraising in May.
Analysts at broker Panmure Gordon expect losses of £10m in 2015, giving negative EPS of 11.4p, compared with losses of £6.1m and 9.2p in 2014.
| HORIZON DISCOVERY (HZD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 160p | MARKET VALUE: | £150m | |
| TOUCH: | 157-163p | 12-MONTH HIGH: | 236p | LOW: 141p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 85p* | NET CASH: | £32.5m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 4.1 | -3.0 | -5.3 | nil |
| 2015 | 8.6 | -6.8 | -7.9 | nil |
| % change | +111 | - | - | - |
*Includes intangible assets of £42.9m, or 46p a share | ||||
