Full-year figures for Hikma Pharmaceuticals (HIK) were warmly received amidst the general carnage in the market. Excluding exceptional items and other adjustments, core operating profit increased by 9 per cent at constant currencies to $508m (£391m), while net operating cash flow also rose a tenth to $472m.
The accompanying dividend hike wouldn’t have gone unnoticed, but attention centred on a separately announced licence agreement signed with Glenmark Pharmaceuticals to commercialise Ryaltris in the US. The drug, delivered by a nasal spray, is designed to combat seasonal allergic rhinitis. Glenmark will develop the treatment, ahead of submission to the US Food and Drug Administration for approval, in exchange for an upfront fee, commercial milestone payments and future royalties.
Looking ahead, the group has based some of its projections on the assumption that asthma treatment Advair Diskus will be launched in the second half of 2020. The group expects revenue in the injectable segment to grow in the low to mid-single digits this year, with a core operating margin in the range of 35 to 37 per cent. Generics revenue is forecast to be $700m to $750m against a core operating margin of around 20 per cent, while the top line of the branded division is expected to grow in the mid single digits.
Morgan Stanley expects cash profits of $630m in 2020, rising to $654m in the following year, with EPS increasing from $1.48 to $1.55 year on year.
| HIKMA PHARMACEUTICALS (HIK) | ||||
| ORD PRICE: | 1,907p | MARKET VALUE: | £4.62bn | |
| TOUCH: | 1,904-1,908p | 12-MONTH HIGH: | 2,212p | LOW: 1,540p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 874p* | NET DEBT: | 11%** | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2015 | 1.44 | 318 | 127 | 32.0 |
| 2016 | 1.95 | 210 | 66.5 | 33.0 |
| 2017 | 1.94 | -738 | -351 | 34.0 |
| 2018 | 2.07 | 293 | 117 | 38.0 |
| 2019 | 2.21 | 491 | 201 | 44.0 |
| % change | +7 | +68 | +72 | +16 |
| Ex-div: | 19 Mar | |||
| Payment: | 7 May | |||
| £1 = $1.30 *Includes intangible assets of $834m, or 344¢ a share. **Includes lease liabilities of $68m. | ||||
