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Sinclair Pharma expects first profits

The specialist aesthetics group is confident about trading in the second half after in-line interim numbers
September 20, 2017

Sinclair Pharma’s (SPH) management remains confident that the group is on track to make its first adjusted cash profits in 2017, despite reporting £1.7m of adjusted cash losses in the first six months of the year. “Overheads are very well controlled and predictable,” according to chief financial officer Alan Olby, while sales are expected to pick up in the second half, due to the annual spike in demand for aesthetics products in the run-up to Christmas.

IC TIP: Hold at 28p

Moreover, a large proportion of the revenue generated from the group’s global network of distributors has already been placed, giving broker Peel Hunt the confidence to forecast adjusted cash profits of £1.5m in the year to December 2017 and the group’s first adjusted earnings per share of 1.3p the year after.

In the reported period, Sinclair made good progress with the roll-out of its first product in the US. The group’s stateside partner, ThermiGen, has now trained more than 700 doctors to implement the Silhouette InstaLift facial enhancer, resulting in £2.3m of revenues from the product. Management expects an acceleration in demand in the second half now that US regulators have loosened rules surrounding the procedure. Outside of the US, the product – sold under the brand name Silhouette Soft – generated a 20 per cent rise in revenues to £7.3m.

SINCLAIR PHARMA (SPH)  
ORD PRICE:28pMARKET VALUE:£141m
TOUCH:27.5-28p12-MONTH HIGH / LOW:36p26p
DIVIDEND YIELD:NILPE RATIO:NA
NET ASSET VALUE:18.4p*NET CASH:£0.1m
Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201617.3-3.4-0.5nil
201720.1-7.8-1.4nil
% change+16---
Ex-div:na   
Payment:na   
*Includes intangible assets of £145m, or 29p a share