Ignoring the foreign exchange boost, sales at BTG (BTG) increased by a tenth in the first half. Indeed, the high relative value of the dollar has been a blessing and a curse. A number of hedging contracts (entered into before the EU referendum) caused foreign exchange losses of £17m. This and a £28m payout to settle a US legal dispute came at a cost to the bottom line. Strip out one-off costs and adjusted underlying operating profit rose by 4 per cent at constant currencies as higher everyday costs offset revenue growth.
The highlight of the period was the performance of the interventional medicine division which, after sales grew 24 per cent at constant currencies, became the largest contributor to revenue for the first time. "We've built a portfolio very well," says chief executive Louise Makin, who has overseen five acquisitions since 2011, four of which increased revenue during this period. With cash flows still strong, net cash of £144m and a £100m undrawn revolving credit facility, with scope for extension, there remains significant room for more acquisitions.
Growth is levelling in the other two major divisions: speciality pharmaceuticals and licensing. The latter is likely to take a hit once top-selling drug Zytiga comes up against generic competition from 2018.
Broker Numis expects pre-tax profits of £76.5m, giving EPS at 16.3p for the financial year ended March 2017 (from £91.6m and 21.5p in FY2016).
BTG (BTG) | ||||
---|---|---|---|---|
ORD PRICE: | 598.5p | MARKET VALUE: | £2.30bn | |
TOUCH: | 597-5-598.5p | 12-MONTH HIGH: | 740p | LOW: 535p |
DIVIDEND YIELD: | nil | PE RATIO: | 103 | |
NET ASSET VALUE: | 240p* | NET CASH: | £144m |
Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2015 | 230 | 52.9 | 13.4 | nil |
2016 | 285 | 11.1 | 3.4 | nil |
% change | +24 | -79 | -75 | - |
Ex-div: na Payment: na *Includes intangible assets of £900m, or 234p a share |