Hikma Pharmaceuticals (HIK) has reported bumper first-half figures helped considerably by the unexpectedly good performance of its normally underachieving generic products division. Overall, this meant that adjusted operating profits rose by 125 per cent to $189m (£120m) on the back of a profit margin that expanded by 13.9 percentage points to 29.6 per cent.
The performance of generics was due to a shortage of medicines in the US as manufacturers are subjected to stringent regulatory inspections after a series of safety problems. The resulting lack of competition meant that Hikma was able to hike sales of antibiotic Doxycycline into the US hospital market. Revenues in the generics division soared by 136 per cent to $132m, while divisional profits surged to $49.2m, compared with a $3.3m loss at the same stage last year. The rest of the company performed in line with expectations, with branded sales up an underlying 8.7 per cent to $257m, and injectables revenues rising almost 10 per cent to $246m. Management now expects overall revenue growth of 20 per cent this year, up from a previous forecast of 17 per cent, and margins to exceed 30 per cent for the full year.
Broker Panmure Gordon expects full-year EPS to increase from 60.8¢ to 90.7¢, rising to 99¢ in 2014.
HIKMA PHARMACEUTICALS (HIK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,116p | MARKET VALUE: | £2.21bn | |
| TOUCH: | 1,115-1,125p | 12-MONTH HIGH: | 1,127p | LOW: 706p |
| DIVIDEND YIELD: | 1% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 445¢* | NET DEBT: | 41% | |
| Half-year to 30 Jun | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 532 | 58 | 20.6 | 6.00 |
| 2013** | 638 | 111 | 37.4 | 7.00 |
| % change | +20 | +92 | +82 | +17 |
Ex-div: 4 Sep Payment: 7 Oct *Includes intangible assets of $435m, or 220¢ a share **Excludes 3¢ a share special dividend £1=$1.57 | ||||
