You have to go back as far as 2014 to find the last time Clinigen (CLIN) reported organic growth rates in its preliminary results. In 2019, like-for-like adjusted gross and cash profit growth of 1 per cent and 4 per cent respectively sit atop the financial report, marking a shift in the group’s primary focus: Clinigen wants to generate underlying profit growth rather than simply buying it in.
Ironically, recent acquisitions should help with that. Services group CSM – which contributed almost £16m of sales after being acquired in October – has more than quadrupled Clinigen’s clinical trial customer base and enhanced its infrastructure in Europe. New medicines Proleukin and Imukin are expected to be earnings enhancing in the current financial year. Consensus forecasts say adjusted EPS will hit 53.9p in FY2020, up from 44.7p in these results.
But a positive earnings outlook won’t stop debt from weighing on the minds of investors. The 2019 financial year’s buying spree sent net debt up to 2.5 times adjusted cash profits from 1.8 times in FY2018, which doubled finance costs. Debt is set to increase again in FY2020 as cash inflows are offset by deferred consideration payments from the acquisitions of CSM and Proleukin.
| CLINIGEN (CLIN) | ||||
| ORD PRICE: | 937p | MARKET VALUE: | £1.24bn | |
| TOUCH: | 935-938p | 12-MONTH HIGH: | 1,069p | LOW: 716p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 234 | |
| NET ASSET VALUE: | 331p* | NET DEBT: | 58% | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 184 | 8.3 | 6.5 | 3.4 |
| 2016 | 340 | 15.9 | 11.9 | 4.0 |
| 2017 | 302 | 14.1 | 3.3 | 5.0 |
| 2018 | 381 | 35.9 | 22.9 | 5.6 |
| 2019 | 457 | 12.3 | 4.0 | 6.7 |
| % change | +20 | -66 | -83 | +20 |
| Ex-div: | 07 Nov | |||
| Payment: | 29 Nov | |||
| *Includes intangible assets of £812m, or 613p a share | ||||
