Traditional ingredients used in medicines are small, artificially manufactured chemicals which are relatively easy to replicate in big batches. Modern drugs are increasingly made up of much larger, live biological particles which require specialised delivery mechanisms and manufacturing. This is good news for Consort Medical (CSRT). The group has developed a novel range of auto-injectors which can be used for these highly complex medicines. Although launch isn’t expected until 2020, analysts have high hopes for the devices.
For now, Consort continues to tick along nicely in its biggest market: respiratory. Revenues from its range of inhalers contribute 84 per cent of sales in the device division, Bespak, and are expected to be boosted by the upcoming launch of a generic version of GlaxoSmithKline’s (GSK) best-selling asthma drug, Advair. The generic – made by US giant Mylan – has suffered delays in the last few months, but is now expected to be launched in the middle of 2018.
In the first half, the Bespak business reported a 2.9 per cent increase in revenues to £60.6m, in line with its historical growth. The manufacturing division, Aesica, grew 5 per cent to £93.1m and widened its adjusted cash profit margin to 12.3 per cent. But continued investment in both the pipeline and operations means Investec analysts have forecast pre-tax profits and EPS of £35.8m and 60.9p in the year to April 2018, jumping to £40.3m and 66.8p the year after (from £35.6m and 64.4p in FY2017).
| CONSORT MEDICAL (CSRT) | ||||
| ORD PRICE: | 1,157p | MARKET VALUE: | £570m | |
| TOUCH: | 1,154-1,160p | 12-MONTH HIGH/LOW: | 1,180p | 965p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 471p* | NET DEBT: | 42% | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 145 | 10.1 | 20.1 | 7.09 |
| 2017 | 154 | 7.5 | 14.2 | 7.44 |
| % change | +6 | -26 | -29 | +5 |
| Ex-div: | 18 Jan | |||
| Payment: | 16 Feb | |||
| *Includes intangible assets of £182m, or 369p a share | ||||
