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Hikma continues to go from strength to strength. The Jordanian generic pharmaceuticals company has been hungry for acquisitions, swallowing up Ribosepharma and Thymoorgan in Germany and, more recently, Alkan Pharma in Egypt. That's partly spurred the impressive revenue growth, with acquisitions contributing $36.6m to revenues in the period. But the underlying business also performed robustly. Strip-out acquisitions, and underlying revenues improved 21.5 per cent in the period, thanks to good growth in the injectables and branded drug divisions.
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However, gross margins declined slightly to 50.7 per cent, from 51.6 per cent, in the period, reflecting a drop in margins at the generics business. And operating expenses also jumped by 59 per cent to $62.2m due to the acquisitions. But operating profits were up 22.7 per cent to $51.8m.
Hikma also secured 81 product approvals and launched 16 new drugs in the period. The company reckons products awaiting approval boast target markets that are worth up to $12bn in annual sales. And more revenue growth is anticipated for the second half of the year, with around 40 per cent sales growth anticipated for the full year.
Broker Merrill Lynch left full-year forecasts unchanged with EPS of 40¢ (33¢ in 2006), rising to 49¢ in 2008.
| HIKMA PHARMACEUTICALS (HIK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 430p | MARKET VALUE: | £721m | |
| TOUCH: | 430-431p | 12-MONTH HIGH: | 437p | LOW: 345p |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 226¢* | NET DEBT: | 19% | |
| Half-year to 30 Jun |
Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2006 | 154.9 | 42.4 | 18.00 | 3.00 |
| 2007 | 224.9 | 49.5 | 21.10 | 3.50 |
| % change | +45 | +17 | +17 | +17 |
Ex-div:26 Sep Payment:26 Oct *Includes intangible assets of $87.5m, or 52¢ a share £1=$2.021 |
||||
Hikma continues to impress. But, trading on 22 times full-year forecast earnings, the good news already looks thoroughly factored-in. Fairly priced.
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-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
