The probability of headwinds for decontamination specialist Bioquell (BQE) had been flagged well in advance of these results, which was why the reaction towards the company's stuttering performance was more muted than might have been expected. However, as defence budgets are squeezed further, the re-organisation that will see Bioquell focus more on the healthcare market needs to deliver results if a prolonged stagnation is to be avoided.
The bio-decontamination business was the main drag on the results, with lower defence sales and a subdued life sciences sector leading to lower divisional revenues of £25.9m, compared with £27.7m in 2011. The testing, regulatory and compliance division, TRaC, did better with demand for testing required by regulation fuelled by the booming civilian aerospace sector - sales were £1.5m higher at £15.1m. Meanwhile, the total order book was flat at £44.6m, with lumpy defence spending again the cause.
Bioquell's reliance on capital-intensive markets means it has to diversify its revenues by selling more consumable items and equipment to healthcare organisations. Accordingly, the company launched several products during the year which it hopes will lead to a better balance of sales. For example, QUBE, a work station for testing in sterile conditions and IG-1, a consumable product that can be incorporated into existing equipment.
Broker Investec forecast pre-tax profits for 2013 of £5m, giving EPS of 8.3p (from £4m and 9.6p in 2012)
BIOQUELL (BQE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 136p | MARKET VALUE: | £56.8m | |
| TOUCH: | 132-140p | 12-MONTH HIGH: | 163p | LOW: 119p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 74p* | NET CASH: | £1.9m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 34.4 | 5.00 | 9.0 | 2.20 |
| 2009 | 39.2 | 5.86 | 10.3 | 2.42 |
| 2010 | 39.4 | 3.26 | 5.8 | 2.62 |
| 2011 | 41.2 | 5.00 | 9.3 | 2.83 |
| 2012 | 41.0 | 3.95 | 9.6 | 3.06 |
| % change | -1 | -21 | +3 | +8 |
Ex-div: 5 Jun Payment: 1 Jul *Includes intangible assets of £12.6m, or 30p a share | ||||
