Top and bottom line figures from genetics group Horizon Discovery (HZD) continue to tell very different stories. But despite the widening losses as internal investment is ramped up, chief executive Darrin Disley assures that the business "will transition into profit by 2017".
The products business, which sells genetically engineered cells to 1,400 customers in 50 countries, benefited from January's acquisition of Haplogen Genomics. The Vienna-based company has widened the product range to 23,000, which helped more than double revenues to £7.8m. Collaborations with companies such as Aim-traded Abcam (ABC) and US-group Swift Biosciences have also widened the division's market reach.
Past acquisitions also helped the services business, which makes up 60 per cent of overall revenue. Sage and CombinatoRx increased Horizon's production capacity, although low utilisation of these new facilities dented margins.
The final division, research biotech, continues to guzzle cash in its quest to develop novel, specific therapeutics. New collaboration agreements mean Horizon is now eligible for £208m of milestone payments. Over the next two years, £10m will be invested in finding new targets and assets, and it is the potential upswing in this division which is expected to move the group into profitability within two years.
Broker Numis expects adjusted pre-tax losses of £9m and a loss per share of 8.4p in 2016, compared with losses of £10.5m and 11.2p in 2015.
HORIZON DISCOVERY (HZD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 179p | MARKET VALUE: | £168m | |
| TOUCH: | 175p-182p | 12-MONTH HIGH: | 199p | LOW: 127p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 85p* | NET CASH | £25m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 3.5 | -4.0 | -1.3 | na |
| 2012 | 3.9 | -5.6 | -1.5 | na |
| 2013 | 6.6 | -3.0 | -7.5 | nil |
| 2014 | 11.9 | -6.1 | -9.2 | nil |
| 2015 | 20.2 | -10.5 | -11.2 | nil |
| % change | +69 | - | - | - |
Ex-div: na Payment: na *Includes intangible assets of £44.4m, or 47p a share | ||||
