There's nothing like a product delay to send shares in a growing pharmaceutical company tumbling. Quantum Pharma (QP) said it experienced a number of regulatory delays in the six months to 31 July 2015, although it still hopes to have 10 out of the 11 previously slated products on the market before the end of the financial year.
Slow decision-making by the Medicines and Healthcare Regulatory Authority (MHRA) did prompt analysts at N+1 Singer to downgrade their EPS forecasts, by 10 per cent for FY2016 and 6 per cent for FY2017. The brokerage now expects pre-tax profits of £10.8m for the current financial year, giving EPS of 6.5p, compared with £6.8m and 9.4p for the year ended January 2015. Quantum shares lost 7 per cent on results day.
But City analysts were also keen to emphasise the strategic progress made by the group in the first half. The acquisitions of the Lamda group of companies in April and NuPharm in July have boosted the group's future product pipeline and manufacturing capabilities in the UK, while an international expansion plan is also under way. After the period-end, Quantum signed its first out-licensing deal for Vitamin D supplement Aviticol with "a major pharmaceutical group" in Germany, which is Quantum's second largest market after the UK.
| QUANTUM PHARMA (QP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 119p | MARKET VALUE: | £149m | |
| TOUCH: | 118-120p | 12-MONTH HIGH: | 174p | LOW: 91p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 99 | |
| NET ASSET VALUE: | 43p* | NET DEBT: | 45% | |
| Half-year to 31 July | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 28.0 | 3.5 | 2.1 | 0.0 |
| 2015 | 34.3 | 2.8 | 2.0 | 0.5 |
| % change | +22 | -21 | -5 | - |
Ex-div: 29 Oct Payment: 20 Nov *Includes intangible assets of £75m, or 60p a share | ||||
