Sinclair IS Pharma (SPH) has spent the past three years moving away from research and development for prescription-based and over-the-counter medicines - it's concentrating instead on the aesthetic dermatology market and self-pay customers. It was obvious from these results that the transition is still proving painful, with impairment charges of £15.2m having exacerbated losses after generic competition forced a writedown on two products. However, cash generation was strong and underlying pre-tax profits rose 69 per cent to £4.3m.
Overall, like-for-like revenue grew 4 per cent, with a 20 per cent like-for-like revenue increase in overseas markets to £20.5m. That helped offset an otherwise weak performance in many recession-hit European markets, where austerity, unfavourable pricing policies and generic competition to its Variquel and Cryogesic products meant a 5 per cent decline in revenues to £34.9m. The UK market was the hardest hit and like-for-like sales slumped 11 per cent but, surprisingly, there was some growth in Europe's weaker economies - Spain and Italy grew sales by 24 per cent and 2 per cent, respectively.
Before these results, broker Canaccord Genuity was forecasting adjusted pre-tax profit for 2014 of £9m, giving EPS of 1.9p (from 0.7p for 2013).
SINCLAIR IS PHARMA (SPH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 29p | MARKET VALUE: | £126m | |
| TOUCH: | 29-29.5p | 12-MONTH HIGH: | 30.3p | LOW: 23.5p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 25p* | NET DEBT: | 6% | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 30.4 | -4.04 | -3.90 | nil |
| 2010 | 27.6 | -18.3 | -13.5 | nil |
| 2011 | 32.8 | -11.7 | -5.10 | nil |
| 2012 | 51.4 | -6.23 | -1.30 | nil |
| 2013 | 55.4 | -17.0 | -3.70 | nil |
| % change | +8 | - | - | - |
*Includes intangible assets of £121m, or 28p a share | ||||
