Shares in ophthalmology equipment maker Optos crashed over 20 per cent after the company's interim pre-tax profits fell well short of broker estimates. Operating profit was only marginally ahead of the comparable period in 2011 after net finance costs are factored in. Nevertheless, the company usually benefits from a stronger second-half sales performance, which is likely to be more pronounced this year given the accelerated roll-out of the Daytona product range.
Excluding acquisitions, underlying revenues increased 11 per cent if you treat rental contracts as operating leases, but a change in product mix resulted in a lower than expected gross margin of 58 per cent and down from 62 per cent in the prior year.
Significantly, sales from outside North America more than doubled to $19m (£11.9m), as Optos moves to diversify its revenue streams. The company had 4,404 customers at the half-year mark, albeit this was 250 shy of analyst expectations, and has made significant progress towards securing a higher recurring revenue stream by progressively moving its customer base to a finance lease model. Strong renewal rates meant receipts from future rental contracts edged up to $144m, despite outright sales of devices more than doubling to $22.7m.
Numis anticipates 2012 EPS of 25.5¢ (2011: 32.4¢).
| OPTOS (OPTS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 202p | MARKET VALUE: | £145m | |
| TOUCH: | 200-204p | 12-MONTH HIGH: | 280p | LOW: 139p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 10 | |
| NET ASSET VALUE: | 147¢* | NET DEBT: | 46% | |
| Half-year to 31 March | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 58.0 | 3.9 | 6.3 | nil |
| 2012 | 86.2 | 5.6 | 4.8 | nil |
| % change | +49 | +44 | -24 | - |
£1 = $1.59 *Includes intangible assets of $53m, or 74¢ a share | ||||
