Investors in Immunodiagnostic Systems are living in hope that a change of management at the medical testing specialist will revitalise a firm where profits have been heavily squeezed by competition. After the resignation of Ian Cookson, the company will need a chief executive with substantial medical diagnostics experience who can drive the development of a broader range of tests. So, until there is more certainty, expect the shares to mark time.
Immudiagnostic is, in fact, caught in a structural squeeze. Sales of manual vitamin-D testing kits are falling faster than customers are adopting the new automated testing machines it sells. And rivals are undercutting prices on manual kits – two thirds of Immunodiagnostic's revenues still come from manual testings kits, and these fell 8 per cent as a result. The company aims to reverse this trend by targeting its IDS-iSYS machine at small- and medium-sized laboratories where the profit margins are better, in addition to developing new more complicated tests such as biomarkers. Meanwhile, placements of IDS-iSYS machines were broadly stable at 79, while sales generated by the instrument rose 57 per cent to £18.2m.
CanaccordGenuity's forecasts are under review but the broker currently expects pre-tax profits of £14.5m for 2013, giving EPS of 37.4p (from £14.9m and 34.6p last year).
IMMUNODIAGNOSTIC SYSTEMS HOLDINGS (IDH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 260p | MARKET VALUE: | £73.8m | |
| TOUCH: | 256-260p | 12-MONTH HIGH: | 1,247p | LOW: 239p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 255p* | NET CASH: | £6.9m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 16.5 | 3.80 | 14.2 | 1.50 |
| 2009 | 24.9 | 4.78 | 16.9 | 1.65 |
| 2010 | 37.2 | 11.0 | 30.0 | 1.65 |
| 2011 | 50.2 | 16.5 | 46.1 | 2.50 |
| 2012 | 53.7 | 7.25 | 16.7 | 2.75 |
| % change | +7 | -56 | -64 | +10 |
Ex-div: 5 Sep Payment: 28 Sep *Includes intangible assets of £53.6m, or 189p a share | ||||
