Jordan-based Hikma Pharmaceuticals (HIK) will pay a special dividend worth 7ȼ (4p) a share, after pre-tax profits more than doubled last year. The top-line also grew by more than a fifth, as strong sales of its antibiotic product doxycycline pushed revenues in the generics business up by 158 per cent.
However, Hikma will not be able to rely on doxycycline to drive similar revenue growth in 2014. With competition in the US generics market set to intensify, the company expects divisional sales of $170m in 2014, reflecting a 37 per cent decline on 2013. And those sales will come with less profit: having reached 47 per cent last year, the adjusted operating margin is expected to fall to just above 25 per cent.
The good news is that generics don’t make up most of Hikma’s revenues. Its branded business is still the breadwinner, with sales up 8 per cent at constant currencies to $554m last year - 41 per cent of the total. Hikma can also count on selling injectables into the US market. The country now accounts for 46 per cent of group revenues, a proportion chief executive Said Darwazah expects to remain roughly constant.
Peel Hunt expects adjusted pre-tax profits of $236m this year, giving adjusted EPS of 88.7ȼ, down from 127ȼ.
HIKMA PHARMACEUTICALS (HIK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,485p | MARKET VALUE: | £ 2.9bn | |
| TOUCH: | 1,490-1,493p | 12-MONTH HIGH: | 1,522p | LOW: 895p |
| DIVIDEND YIELD: | 0.8%** | PE RATIO: | 23 | |
| NET ASSET VALUE: | 514ȼ* | NET DEBT: | 26% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
|---|---|---|---|---|
| 2009 | 0.64 | 95 | 41 | 11 |
| 2010 | 0.73 | 121 | 51 | 13 |
| 2011 | 0.92 | 94 | 41 | 13 |
| 2012 | 1.11 | 132 | 51 | 16 |
| 2013 | 1.36 | 298 | 108 | 20 |
| % change | +23 | +126 | +111 | +25 |
Ex-div:23 Apr Payment:22 May *Includes intangible assets of $447m or 226ȼ per share **Excludes special dividend of 7ȼ per share £1 = $1.66 | ||||
