A better second-half performance at testing and screening company Cyprotex (CRX) helped it avoid a full-year loss - after the group's toxicology unit was hit by a delay to a large US government contract. Such a delay is a worrying precedent given that government budgets are under pressure at the same time that big pharmaceutical companies are also retrenching.
Operationally, management decided to concentrate on improving its existing offering rather than broadening out its range of pharmacological tests. For example, spending on research and development was only modestly lower in the year at £0.44m, from last year's £0.58m - but this was dwarfed by the £1.1m outlay on capital spending, up from £0.31m the year before. Significantly, that new spending was to update existing equipment, with two more mass spectrometer analytical devices on order at the year-end at a cost of £0.39m. This is in response to a quickly fragmenting market for outsourced testing as major pharmaceutical companies have reduced their research functions, leaving fewer opportunities for outsourcers to bid for testing contracts. Although management reckons the situation is stabilising, with more opportunities becoming available as testing companies consolidate.
N+1 Singer expects adjusted pre-tax profit for 2013 of £0.7m, giving adjusted EPS of 0.3p (from £0.2m/0.1p in 2012).
CYPROTEX (CRX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 3.75p | MARKET VALUE: | £8.4m | |
| TOUCH: | 3.5-4p | 12-MONTH HIGH: | 6.75p | LOW: 3p |
| DIVIDEND YIELD: | nil | PE RATIO: | 42 | |
| NET ASSET VALUE: | 3p* | NET DEBT: | 8% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 5.18 | 0.54 | 0.36 | nil |
| 2009 | 5.00 | 0.46 | 0.26 | nil |
| 2010 | 5.92 | 0.20 | 0.31 | nil |
| 2011 | 7.91 | 0.59 | 0.39 | nil |
| 2012 | 8.33 | 0.25 | 0.09 | nil |
| % change | +5 | -57 | -77 | - |
Ex-div:- Payment:- *Includes intangible assets of £3.4m, or 1.5p a share | ||||
