EKF Diagnostics (EKF) intends to pay shareholders its first-ever dividend following approval at its 2020 first-half annual meeting, rewarding shareholders with 1p a share for 2019.
The manufacturer and developer of diagnostics instruments cited robust cash generation as its rationale for the dividend, producing £4.34m from operations. EKF also revealed a partnership with Mount Sinai Innovation Partners, which commercialises discoveries made within the Mount Sinai Health System, New York's largest integrated healthcare provider. The deal gives the company access to any new diagnostic products that come out of the North American partner.
Chief executive Julian Baines said that this tie-up will take it closer to market and also see it benefit from the influence of key opinion leaders linked with its partner. An agreement to licence Mount Sinai technology concerning the treatment of Inflammatory Bowel Disease has been signed, and Mr Baines said that another agreement with it is in the offing for EKF’s second half.
The group also secured a first revenue contribution from its contact with McKesson-Surgical following the April launch of its haemoglobin analyser, with the $280,000 (£225,557) in sales over the first three months beating management expectations. “You’ll see large growth in the McKesson contract” over EKF’s second half, Mr Baines predicted.
House broker N+1 Singer forecasts full-year 2019 pre-tax profits and earnings per share of £9.5m and 1.5p, respectively, rising to £10.3m and 1.6p in 2020.
| EKF DIAGNOSTICS (EKF) | ||||
| ORD PRICE: | 33p | MARKET VALUE: | £148m | |
| TOUCH: | 33-35p | 12-MONTH HIGH: | 38p | LOW: 24p |
| DIVIDEND YIELD: | nil | PE RATIO: | 14 | |
| NET ASSET VALUE: | 15p* | NET CASH: | £11.8m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 20.4 | 1.71 | 0.15 | nil |
| 2019 | 21.4 | 2.23 | 0.29 | nil |
| % change | +5 | +30 | +93 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £41m, or 9p a share | ||||
