Consort Medical's chief executive Jonathan Glenn admitted earlier this year that many of the drug delivery specialist's markets are relatively mature. So investors took heart from the news that auto and needle free injector specialist, The Medical House, has been acquired for £16.8m.
Still, that maturity problem isn't as bleak as it seems. Add back special items, worth £2.65m and principally comprising severance payments, and profits fell by a fairly modest 5 per cent to £7.8m. In fact, the group's King Systems unit - which makes medical devices in the US, used to establish and maintain patient airways - saw sales jump 21 per cent (4.2 per cent in sterling terms). Even so, operating profits there, after adjusting for sterling weakness, still rose 23 per cent to £1.9m, while the unit's operating margin rose from 8.1 per cent to 9.1 per cent. Although this remains below the 14 per cent long-term average and reflects significant spending on research and development. Meanwhile, the drug delivery device division, Bespak, suffered a 10 per cent fall in turnover to £37.5m - that's down to a major contract having been renewed on lower terms and customer destocking of specialist equipment.
Investec Securities expects full-year pre-tax profits of £16.6m and EPS of 39.6p (2009: £17.9m/44.8p).
| CONSORT MEDICAL(CSRT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 345p | MARKET VALUE: | £99.9m | |
| TOUCH: | 350-364p | 12-MONTH HIGH: | 515p | LOW: 312p |
| DIVIDEND YIELD: | 5.5% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 240p* | NET DEBT: | 26% | |
| Half-year to 31 Oct | Turnover (£m) | Pretax profit (£m) | Earnings per share (p) | Net div per share (p) |
|---|---|---|---|---|
| 2008 | 64.1 | 7.68 | 15.2 | 7.00 |
| 2009 | 61.5 | 5.19 | 12.8 | 7.00 |
| % change | -4 | -32 | -16 | - |
Ex-div:20 Jan Payment:19 Feb *Includes intangible assets of £53m or 183p a share | ||||
