With Hikma Pharmaceutical's (HIK) shares up more than 80 per cent over the past 12 months, it’s natural to wonder how much further the stock has to travel. But if the negative market reaction on results day is any indication, it seems investors aren’t willing to accept even the slightest disappointment. Adjusted EPS of 138¢ (104p) beat consensus estimates by 2 per cent, but revenues of $2.1bn fell short of expectations, while adjusted operating profits of $460m missed Peel Hunt’s forecast by 2 per cent following higher operational expenses, including impairments. Hardly disastrous, but given the share price trajectory, you wonder if the risk now is heavily weighted to the downside.
That shouldn’t detract from a year of progress which, led by new chief executive Siggi Olafsson, included 122 new product launches. But current year guidance has dimmed the likelihood of further earnings upgrades. The injectables business is expected to deliver sales in the region of $850m to $900m, while the generics business should bring in between $650m and $700m. Broker Peel Hunt said this, along with an expected operating margin in the range of 35-38 per cent, didn’t prompt an adjustment to forecasts. Analysts there still expect adjusted pre-tax profits of $419m, giving EPS of 134¢ this year, compared with $408m and 138¢ in 2018.
| HIKMA PHARMACEUTICALS (HIK) | ||||
| ORD PRICE: | 1,577p | MARKET VALUE: | £ 3.81bn | |
| TOUCH: | 1,576-1,578p | 12-MONTH HIGH: | 2,089p | LOW: 867p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 698¢* | NET DEBT: | 21% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2014 | 1.49 | 362 | 140 | 32.0 |
| 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 |
| % change | +7 | - | - | +12 |
| Ex-div: | 04 Apr | |||
| Payment: | 22 May | |||
| *Includes intangible assets of $766m, or 317¢ a share. £1 = $1.32 | ||||
