(Alliance News) - Ergomed PLC on Friday said profit firmed in the first half of 2023 as revenue improved more than costs rose, expressing a positive outlook and noting a prior agreed takeover offer from Permira Advisers LLP earlier this month.
In the six months that ended June 30, the Guildford, England-based pharmaceutical services company said pretax profit rose 4.3% to GBP9.6 million from GBP9.2 million a year earlier.
Revenue was up 9.7% to GBP76.7 million from GBP69.9 million. This was offset by costs of sales rising 10% to GBP45.1 million from GBP41.0 million and selling, general and administrative expenses increasing 11% to GBP22.0 million from GBP19.9 million.
The company did not declare a dividend payment to shareholders, unchanged.
"Ergomed has made a very solid start to the year demonstrating continued growth and reflecting the global appeal of our offering to our clients, the strength of our business model and the resilience of the markets we address," said Founder & Executive Chair Miroslav Reljanovic.
"We have continued to execute on our strategy to transform the business by investing in technology and our commercial infrastructure and believe the potential of these investments is reflected in the robust year over year growth of our new business pipeline. In addition, we have maintained our focus on prudent cost management, and executing our disciplined approach to [mergers & acquisitions]."
Looking ahead, Ergomed said it has strong order book of GBP310 million with growth of 9% from a year earlier, or 11% when adjusting for foreign exchange. This provides "excellent" visibility into the second half of 2023 "and beyond", Ergomed said.
The company also noted new business pipeline growth of 30% over the first half, which it said reflected the benefits of commercial investments.
Ergomed said it expects full-year 2023 revenue to be in line with market expectations, demonstrating its "resilience and ability to maintain its strong financial performance despite the continued challenging macro-economic environment".
Shares in Ergomed were down 0.4% to 1,350.00 pence each in London on Friday morning.
Earlier this month, Ergomed agreed to a takeover offer from London-based, healthcare-focused private equity firm Permira Advisers, hailing Permira's "strong" track record in the healthcare sector.
The offer for Ergomed is 1,350p per share and values the entire company at GBP703.1 million. Ergomed's directors said it deemed the offer to be "fair and reasonable", recommending that shareholders vote in favour of the offer at forthcoming court and general meetings.
If all conditions pass, Ergomed said at the time it expects the takeover to become effective in the first quarter of 2024.
The offer already has received support from Chair Reljanovic, representing 18% of Ergomed shares, alongside support from Amanti Global Investors Ltd, bringing total support so far to 20% of Ergomed shares.
By Greg Rosenvinge, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
