Opthalmology equipment-maker Optos has started to see the first tangible benefits from a re-organisation of the company's business model away from a reliance on the North American market - overseas sales outside the US have doubled to $26.2m (£16m) - as well as a change in the business model.
This involved moving optometrists from a pay-per-patient rental model to finance leases in order to guarantee a recurring revenue stream, while management concentrated on building up the product portfolio to sell directly to the industry through its sales force. Taken together, this meant a big increase in outright product sales, up from $8.1m in 2010 to over $37.6m and includes $3m of sales generated by the Optoglobal acquisition. Sales from finance leases more than doubled from $7.7m to $19.8m.
Chief executive Roy Davis said Optos had found clients outside of the US, particularly in Japan where a new distributor has found a ready market for its machines. However, the change in sales mix affected margins but this had been expected, he said.
Peel Hunt analysts were previously forecasting current year EPS of 26.2¢, but will be upgrading these estimates due to lower levels of depreciation. EPS in the 12 months to September 2011 benefited from a tax credit, but Optos will be liable for a full tax liability on profits in the current financial year.
OPTOS (OPTS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 215p | MARKET VALUE: | £153m | |
| TOUCH: | 215-216p | 12-MONTH HIGH: | 233p | LOW: 103p |
| DIVIDEND YIELD: | nil | PE RATIO: | 11 | |
| NET ASSET VALUE: | 140¢* | NET DEBT: | 25% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2007 | 86 | 1.6 | 2.4 | nil |
| 2008 | 101 | 5.9 | 6.7 | nil |
| 2009 | 97 | -3.8 | -6.1 | nil |
| 2010 | 106 | 12.7 | 18.1 | nil |
| 2011 | 143 | 22.0 | 31.0 | nil |
| % change | +35 | +73 | +71 | - |
*Includes intangible assets of $27.1m, or 38¢ a share | ||||
