Ergomed earnings to beat expectations for 2020
By Josh White
Date: Tuesday 26 Jan 2021
(Sharecast News) - Specialist pharmaceutical service provider Ergomed updated the market on its trading in 2020 on Tuesday, saying it still expected revenue for the year ended 31 December to be in line with current market expectations, and adjusted EBITDA to be ahead of current expectations.
The AIM-traded firm said it completed the acquisitions of Ashfield Pharmacovigilance in January 2020 and MS Clinical Services, or 'MedSource', in December, strengthening its position in the US, the largest global pharmaceutical services market, adding more than 60 new customers and 200 professional staff.
It said the positive trading performance seen in both its pharmacovigilance and clinical research organisation businesses during the first six months of the year had continued through to the year-end, and resulted in a "strong" order book at the start of 2021.
Revenues for 2020 were expected to be around £86.4m, including £1.1m revenues in MedSource in December, making for an increase of 26.5% over the prior year.
Pharmacovigilance revenues were ahead 56% to £55.1m, and by 30% to £46m on a like-for-like basis excluding the impact of Ashfield, now trading as PrimeVigilance USA.
Contract research organisation revenues were "broadly flat" for the full year at £31.3m, including £1.1m MedSource revenues.
It said contract research organisation revenues increased in the second half on an organic basis to £15.9m, up 11.2% over the first half and up 15.2% over the prior year.
The strong revenues and continued focus on profitability in 2020 were expected to result in adjusted EBITDA for the year being ahead of current market expectations, the board said.
It said order books for both the pharmacovigilance and contract research organisation divisions had grown organically, and been augmented by the acquisitions of Ashfield and MedSource.
The total combined order book as at 31 December was expected to be about £190m, up 53% over prior year.
Ergomed said it had continued to be debt-free at year-end, with cash and equivalent balances of £18.9m, up from £14.3m year-on-year, and unused banking facilities of £30m.
The company said its outlook for 2021 was positive, bolstered by the strong order book and the acquisitions of Ashfield and MedSource.
Those acquisitions had "considerably strengthened" Ergomed's presence in the strategically-important US market and globally, the board said, further enhancing growth potential in both the pharmacovigilance and contract research organisation businesses.
"In 2020, Ergomed demonstrated the resilience and robustness of our services business model, continuing our strong organic growth and completing key strategic acquisitions in the US in both our pharmacovigilance and CRO businesses," said executive chairman Dr Miroslav Reljanović.
"Despite the global Covid-19 pandemic, Ergomed performed ahead of market expectations for the full year.
"We start 2021 from a position of considerable strength, in a robust financial and strategic position and with a strong order book to support our strategy of leadership as a pharmaceutical services specialist with a global presence."
Ergomed said it would provide further details of its performance for 2020 in its preliminary results announcement in March.
At 0916 GMT, shares in Ergomed were up 8.06% at 1,059p.
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