Impressive full-year numbers from Sinclair Pharma (SPH) were overshadowed by news that the group will pay £5m in compensation to Alliance Pharma (APH), after one of the drugs it sold to its peer failed to perform as expected. Although the shares dropped 5 per cent on the news, analysts seem unconcerned: with net cash of £16.8m at the year-end and a new £10m revolving debt facility, Sinclair has plenty of financial headroom to deal with the fee.
Sinclair's strategy to expand into the world's two largest aesthetic dermatology markets - the US and Brazil - is gaining pace. In August, the group launched non-surgical facelift product Silhouette InstaLift via its US distribution partner ThermiGen, generating initial sales worth £1.3m. The establishment of a Brazilian affiliate also helped send total sales of Silhouette Soft and facial filler product Perfectha up 51 per cent and 43 per cent respectively.
But even excluding these two markets, underlying revenue rose by 51 per cent, while improved manufacturing efficiency sent gross margins up 240 basis points to 70.7 per cent. Although the business is still in the red, management expects to move into a cash profit position by the end of the year. Broker Stifel still expects an adjusted loss per share of 0.3p for the year ending December 2017 (from a loss of 1.7p in FY2016).
SINCLAIR PHARMA (SPH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 32p | MARKET VALUE: | £161m | |
| TOUCH: | 31.5-32p | 12-MONTH HIGH / LOW: | 37p | 26p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 20p* | NET CASH: | £16.8m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 55.4 | -17.0 | -3.7 | nil |
| 2014 | 63.6 | -4.4 | -0.9 | nil |
| 2015** | 27.8 | -24.4 | -4.7 | nil |
| 18 months to Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 45.5 | -34.0 | -6.7 | nil |
| % change | +63 | - | - | - |
Ex-div: na Payment: na *Includes intangible assets of £149m, or 30p a share **Adjusted to account for disposal of non-aesthetics business | ||||
