This set of half-year results was a chance for Quantum Pharma (QP.) to prove that the “simplification strategy” initiated subsequent to last year’s profit warning is having the desired effect. The focus of the business is now on the special and niche divisions, with the former business continuing to “perform reliably” despite increased competitive and regulatory pressure. The decision was taken to close the loss-making NuPharm operation and hive-off ‘Biodose services’, which should feed though into improved margins. The signs are positive, with adjusted cash profit up by a quarter to £5.7m and net cash inflows from operating activities at £4.6m.
This turnaround strategy appears to have piqued the interest of Clinigen (CLIN). The pharmaceutical company submitted a possible cash/shares offer for Quantum. Clinigen has until 13 September to make the offer official.
Analysts have suspended coverage of Quantum due to the prospective offer, but at the half-year trading update N+1 Singer guided for pre-tax profit of £7.5m in the year to January 2018, giving EPS of 3.5p, compared with £5.5m and 4.6p in FY2017.
| QUANTUM PHARMA (QP) | ||||
| ORD PRICE: | 69p | MARKET VALUE: | £116m | |
| TOUCH: | 67-70p | 12-MONTH HIGH: | 91p | LOW: 33p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 30p* | NET DEBT: | 24% | |
| Half-year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 32.1 | 1.63 | 0.8 | nil |
| 2017 | 36.2 | 3.26 | 1.7 | nil |
| % change | +13 | +109 | +113 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £57.9m, or 34p a share | ||||
