Using its sheep monoclonal antibody technology, Bioventix (BVXP) creates and supplies antibodies that can locate specific cells within human blood to make clinical diagnoses. More than two-thirds of revenue is derived from royalty and licensing fees when customers employ the group’s antibodies in their diagnostic products – these payments jumped by 14 per cent to £6.3m in FY2019.
Used to test for vitamin D deficiency, sales of its most popular ‘vitD3.5H10’ antibody increased by 27 per cent to £4.3m. Whilst pricing pressures are offseting volume growth in the more mature European and US markets, the group is benefitting from customers like South Korean Boditech tapping the burgeoning Asian market. Expecting more modest Vitamin D revenue growth moving forward, the group believes its troponin assays will become the stand-out driver of sales momentum. Still in the early roll-out stage, troponin sales only amounted to £120,000 but finnCap forecasts they could reach up to £3.5m by 2025.
With a typical 4 to 10-year gap between the research phase and royalty revenue coming through, the current development pipeline aims to sustain growth beyond 2025. But expansion comes at a cost; a near-30 per cent surge in research and development costs during the period served to limit operating profit growth to just 1 per cent to £7m.
finnCap anticipates adjusted pre-tax profit of £7.8m and EPS of 124.8p for the June 2020 year-end, rising to £8.6m and 136.8p in FY2021.
| BIOVENTIX (BVXP) | ||||
| ORD PRICE: | 3,160p | MARKET VALUE: | £161m | |
| TOUCH: | 3,150-3,180p | 12-MONTH HIGH: | 4,100p | LOW: 2,740p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 212p | NET CASH: | £6.5m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)* |
| 2015 | 4.33 | 3.12 | 50.7 | 32.6 |
| 2016 | 5.52 | 4.22 | 69.2 | 42.5 |
| 2017 | 7.25 | 5.77 | 96.4 | 51.0 |
| 2018 | 8.75 | 6.87 | 110 | 61.0 |
| 2019 | 9.29 | 6.97 | 114 | 73.0 |
| % change | +6 | +1 | +3 | +20 |
| Ex-div: | 31 Oct | |||
| Payment: | 15 Nov | |||
| *Excludes special dividends of 20p in 2016, 40p in 2017, 55p in 2018 and 47p in 2019 | ||||
