Share prices are forward indicators. BTG may be hedged but future hedges will be at 1.30 or possibly even lower. Is it £13M in earnings per 5c, do I recall? At 1.30; this stock must have a long way to run, albeit with earnings realization a little way down the track. Just dipping in with a further £30k.
From BTGs annual report: “The average rate for the year was $1.51 compared to $1.61 in the prior year. A five cent movement in the dollar exchange rate results in an approximate £13m change in Group revenues.”
With the current exchange rate at $1.32/£ BTG will benefit by around £50m pa!
SP seems to be holding up - in spite of Louise and Rolf's cashing out of a cool £3.3 million+ worth of shares between them recently, in part to cover tax and national insurance liabilities apparently. Lucky them.
Date Broker Recommendation Price Old target price New target price Notes 18 May 16 Jefferies International Buy 619.75 850.00 840.00 Reiterates 18 May 16 JP Morgan Cazenove Neutral 619.75 780.00 800.00 Reiterates 18 May 16 Deutsche Bank Buy 619.75 755.00 740.00 Retains 17 May 16 Stifel Hold 619.75 - - Reiterates 17 May 16 Jefferies International Buy 619.75 850.00 850.00 Reiterates
British Technology Group was a sell off of Government research of 80's. They actually have a key patent used by Sony in the flash card but never got a penny. You will see from results that the royalties of the drugs developed by Britain best medical boffins are the biggest earner for the company and Abiaterone (brilliant drug for advanced prostatic cancer) is biggest single earner. It still has a few more years on license so perhaps half a billion in earning. Revenue growth of BTG is up 22% but nearly half of this is currency conversion. I see that the market likes the results but sadly most of the income is not being returned to shareholders but rather used in buying up other companies, perhaps at a very full price. I got my shares in BTG when they bought Protherics which I found when they were producing the anti venom for adders and my son managed to find one in the New Forest, which very kindly chose not to bite back! The Protherics buy has been cash generative to BTG. The company bought another UK company Biocompatibles, which made stents to keep blood vessels open but conversely developed a compound to seal them for the non-operative treatment of varicose veins. At some expense to company got this licensed in USA and it was to be the best thing since sliced bread. The share price doubled, I sold half but still hold my "free" shares. The income from Varithema is less than 1% of that of Abiraterome, licensed to J&J. Varithema has been a bit slow to take off (understatement of the year). The cash generated from Abiraterome and Alemtuzumab (for chronic relapsing MS) is not being returned to shareholders but rather spent buying up other promising companies. The monies spent remain on the balance sheet, the company gets bigger, may even reach the FTSE100. Think Hanson in the 80's, built the balance sheet with the earning of takeovers and the sp grew with the balance sheet until the penny dropped, followed by the sp. The two latest buys by BTG are PneuRx for COPD and Galil Medical for kidney cancer. If Varithema and the two new treatments are successful then the shares are worth £6 and, if one is a blockbuster, could even be worth £15. If there is a clinical event with just one (and that is odds on) look at £4 and if more than one is not a clinical success you would be lucky to catch 200p as sp heads rapidly South.
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