Specialist pharmaceutical group BTG (BTG) is spending big. Reported pre-tax profits dropped by a fifth last year as the company poured cash into research and development (R&D), acquisitions and expanding sales forces in the US, Europe and Asia. Chief financial officer Rolf Soderstrom says the group will allocate funds in a similar way this year, although any increase in costs won't be "a big step change" for BTG.
Sales growth remains strong - like-for-like sales increased by 21 per cent last year. But BTG's spending habits may put forecasts and margins under pressure. Gross margins should remain stable at 70 per cent this year, but the 'contribution margin' (gross profit less sales costs, which exclude R&D) of 35 per cent came in short of brokerage Numis's forecast of 37 per cent.
Chief executive Louise Makin says BTG is "bang on track" and that its buy-and-build strategy is laying the foundations for future growth. Specifically, the group is focused on growing its interventional medicines division, targeting revenues of £1.25bn by 2021.
Numis expects EPS of 20p for the current financial year, up from 15.7p last year.
| BTG (BTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 760p | MARKET VALUE: | £2.9bn | |
| TOUCH: | 758-760p | 12-MONTH HIGH: | 835p | LOW: 510p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 83 | |
| NET ASSET VALUE: | 199p* | NET CASH: | £74m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 111 | -10.8 | 3.4 | nil |
| 2012 | 197 | 23.0 | 4.5 | nil |
| 2013 | 234 | 24.1 | 5.0 | nil |
| 2014 | 291 | 33.3 | 6.8 | nil |
| 2015 | 368 | 26.7 | 9.1 | nil |
| % change | +26 | -20 | +34 | - |
Ex-div: na Payment: na *Includes intangible assets of £782m, or 205p a share | ||||
