A bumper year of sales for Hutchison China MediTech (HCM) prompted traders to cheer its share price up another 10 per cent on the day these full-year figures appeared. Group revenues doubled to $92m (£60m) after the new Hutchison Sinopharm business reported inaugural sales of more than $50m. And this figure excludes sales from two Chinese joint ventures which collectively brought in $456m.
But the bottom line was dented by a decision to spend more on clinical trials. Improved profitability at the China Healthcare and consumer products divisions pushed operating profits up to $10.2m ($9.6m in 2013), but diverting more cash into research and development (R&D) sent group net profits down 8 per cent to $5.4m.
HCM has 16 clinical studies running in parallel, 10 of which have been awarded 'breakthrough status' by the US Food and Drug Administration. So that they can reach patients who need them more quickly, these treatments won't be subject to the usual three-phase approach to drug development. The amount of money spent on clinical trials rose to $45m last year, compared with $30m in 2013. That led to an operating loss of $9.7m for the R&D division.
Analysts at Panmure Gordon expect adjusted pre-tax profits of $23.7m this year, giving EPS of 22.9ȼ (from 10.2ȼ in 2014).
| HUTCHISON CHINA MEDITECH (HCM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,350p | MARKET VALUE: | £717m | |
| TOUCH: | 1,330-1,370p | 12-MONTH HIGH: | 1,538p | LOW: 750p |
| DIVIDEND YIELD: | nil | PE RATIO: | 250 | |
| NET ASSET VALUE: | 179ȼ | NET DEBT: | 2% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 22.4 | 11.9 | 18.2 | nil |
| 2013 | 46.0 | 10.1 | 14.1 | nil |
| 2014 | 91.8 | 6.6 | 8.3 | nil |
| % change | +100 | -35 | -41 | - |
Ex-div: na Payment: na £1 = $1.54 | ||||
