As the global market for gene editing begins to accelerate, Horizon Discovery (HZD) has been busy expanding its capabilities to serve that market. In 2016, the group spent £6.2m developing its genetically engineered cell lines which are used by researchers and companies in drug discovery and development. With the product catalogue gaining traction, Horizon has attracted a number of new customers and partners.
But financially, there still isn't much of a story to tell. True, top line progress is strong, but it's growing from a very low base. Costs are also mounting, with £5.3m of expenses coming from sales and marketing and £13.3m from administration. The group therefore reported an adjusted cash loss of £3.8m.
But this was an £0.8m improvement on last year and management remains confident in the group's ability to move into a cash profit position by the end of 2017. The products business reported a significant margin improvement and the relocation of the group's Boston development site should extract £5m of costs this year.
Broker Numis has forecast adjusted cash profit of £0.2m for the December 2017 year-end, from an £8.4m loss in the reported period.
HORIZON DISCOVERY (HZD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 210p | MARKET VALUE: | £202m | |
| TOUCH: | 207-213p | 12-MONTH HIGH: | 219p | LOW: 105p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 81p* | NET CASH: | £6m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 3.9 | -5.6 | -1.5 | nil |
| 2013 | 6.6 | -3.0 | -7.5 | nil |
| 2014 | 11.9 | -6.1 | -9.2 | nil |
| 2015 | 20.2 | -10.5 | -11.2 | nil |
| 2016 | 24.1 | -12.5 | -12.1 | nil |
| % change | +19 | - | - | - |
Ex-div:na Payment:na *Includes intangible assets of £52m, or 54p a share | ||||
