Horizon Discovery is still in the red

But management remains confident that Horizon will have broken even on an adjusted cash profit basis by the end of the financial year, after excluding exceptional costs. Trading is weighted to the second half and underlying revenues are expected to accrue to roughly £19.4m in the six months to December, enhanced by the recent acquisition of Dharmacon from GE Healthcare. The new company is the global leader in developing research tools for a gene editing therapy known as RNA interference, which broker Numis thinks could become more popular given its recent success in treating patients with a rare liver disease.

Gross margins are also moving in the right direction, reaching 64 per cent in the reported period, from 48 per cent in the first half of 2016. But still, the lower-margin service business is making the biggest contribution to the top line (56 per cent) and growing at a faster rate than higher-margin product sales.

Numis still expects a pre-tax loss of £5.7m in the year to December 2017, giving a loss per share of 3.9p (compared with losses of £12.5m and 12.1p in 2016). But pre-tax profits and EPS of £1.8m and 0.9p are forecast in the following year, while compound annual revenue growth of 14 per cent is expected through to 2020.