Investors reap the rewards of fast growing Bioventix

Since joining Aim from the UK’s NEX market in 2014, Bioventix has reported 28 per cent compound annual revenue growth, while earnings per share have surged from 30p to 96p. Equally impressive are the company’s operating margins and return on capital employed which, in these full-year results, were 79 per cent and 56 per cent, respectively. Dividend growth of 23 per cent has been recorded in the last four years, not including the 40p special dividend that investors will receive in November. Management decided that a 23 per cent increase in operating cash inflows warranted this extra pay out.

Scientists use sheep antibodies to locate specific cells within a human blood sample to accurately diagnose disease. While demand for Bioventix's products remains strong, the loss of a large licensing contract is likely to stunt growth in the year to June 2018. Broker finnCap therefore expects pre-tax profit of £5.4m giving EPS of 85.9p (from £5.8m and 96p in FY2017). That said, potential acceleration of its work with global diagnostics machine company Siemens could eventually help replace the lost revenues.