Hefty goodwill/amortisation impairments exacerbated statutory losses at Horizon Discovery (HZD), though strip out these non-cash charges, along with an extra £5.5m in marketing and distribution costs, and the gene editing specialist would have edged within sight of the breakeven point. The charges relate to a reassessment of revenue growth at the group’s In Vivo business unit, while the step-up in commercial costs reflects the integration of the Dharmacon salesforce and a new eCommerce platform.
The strategic rationale for the 2017 acquisition of Dharmacon (bought from General Electric Co) was that it provided access to an academic market where Horizon had limited presence historically, but the $85m (£65m) deal also provided a commercial base in the US, while enhancing its distribution channels in the fast-growing Asia Pacific region. Even with the 73 per cent hike in constant currency revenue, it is too early to weigh the overall impact of the acquisition.
Broker Numis expects cash profits of £1.0m for the December 2019 year-end, leading to a loss per share of 2.1p, rising to £2.6m and a loss of 0.9p in 2020.
| HORIZON DISCOVERY (HZD) | ||||
| ORD PRICE: | 184p | MARKET VALUE: | £ 277m | |
| TOUCH: | 184-185p | 12-MONTH HIGH: | 252p | LOW: 139p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 95p* | NET CASH: | £26.7m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 11.9 | -6.1 | -9.2 | nil |
| 2015 | 20.2 | -10.5 | -11.2 | nil |
| 2016 | 24.1 | -12.5 | -12.1 | nil |
| 2017 | 35.0 | -15.7 | -9.6 | nil |
| 2018 | 58.7 | -40.7 | -23.9 | nil |
| % change | +68 | - | - | - |
| Ex-div: | - | |||
| Payment: | - | |||
| *Includes intangible assets of £97.4m, or 65p a share. | ||||
