Companies that are exposed to the research budgets of large pharmaceutical companies have needed to adapt to tougher times as those major players have cut costs or even abandoned major areas of clinical research. Avacta's (AVCT) specialist research machines are certainly subject to such spending pressures - but diversification through exports and sales of consumables appear to have offset the worst, with group sales up solidly in the year. However, sustainable profitability could be some way off unless capital spending picks up.
Avacta's main product, Optim, is an analytical research machine and the group saw 21 units shipped and installed during the year - generating a 59 per cent rise in product revenues to £1.29m. Meanwhile, the importance of the export market was clear at Avacta animal health, which generated a 23 per cent sales hike to £1.49m. Sales of consumable products, meanwhile, grew 127 per cent - helped by hefty growth in sales of Optim consumable cartridges. January's acquisition of reagent platform Aptuscan offers potential, too. Chief executive Alastair Smith thinks Avacta can overcome capital spending pressures by launching new consumables products.
House broker Panmure Gordon has downgraded 2013's expected loss per share estimate from 0.01p to 0.04p.
AVACTA (AVCT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 0.89p | MARKET VALUE: | £28.1m | |
| TOUCH: | 0.88-0.90p | 12-MONTH HIGH: | 1.06p | LOW: 0.59p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 0.54p* | NET CASH: | £4.2m | |
| Year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 0.47 | -1.57 | -0.18 | nil |
| 2009 | 0.94 | -2.84 | -0.28 | nil |
| 2010 | 2.07 | -2.03 | -0.15 | nil |
| 2011 | 2.45 | -1.12 | -0.04 | nil |
| 2012 | 3.13 | -1.60 | -0.04 | nil |
| % change | +28 | - | - | - |
*Includes intangible assets of £12.1m or 0.38p a share | ||||
