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28 Jun 2018 07:00
PRESS RELEASE
Trading update
London, UK - 28 June 2018: Ergomed plc (LSE: ERGO) ("Ergomed" or the "Company"), a company focused on providing specialised services to the pharmaceutical industry, announces an update on trading for 2018.
Demand for both clinical research services ("CRS") and drug safety and medical information ("DS&MI") segments remains generally buoyant. However, due to delays in the start-up of some contracts and reductions in scope by sponsors of others, revenue for the first half of 2018 is expected to be below management's expectations and revenue for the full year is now likely to be around 5% less than market consensus for 2018.
The Company continues to invest in line with its stated strategy to position itself as a market leader in pharmacovigilance and orphan drug development segments by 2020. These investments include the addition of project personnel across geographies, the investment in robotic process automation technology to deliver longer-term operational efficiencies and the upgrading of our support capabilities in terms of systems and personnel. The Company expects to continue investing, albeit at a reduced rate, in the second half of 2018.
From a profitability perspective, 2018 will be impacted by delayed revenues and the level of investment being made. The Company believes it is prudent, therefore, to guide investors to expect adjusted EBITDA for 2018 to be only modestly ahead of 2017's adjusted EBITDA of £2.8 million.
The Company's backlog, including two contracts on the point of signature, is just over £100 million, compared with £88 million on 1 January 2018. The Company's cash position remains strong with positive cash flows in the period.
Stephen Stamp, Chief Executive Officer of Ergomed plc said: "This year, we anticipated exceeding market expectations for revenue, allowing us to more than cover the cost of the additional investment required to deliver our strategic goals for 2020. It is unfortunate that delays and reductions in scope of a limited number of contracts has resulted in us investing ahead of the curve. The business overall is in robust health, as demonstrated by a backlog approaching £100 million, and we are confident 2018 will provide a solid foundation for future growth."
- Ends -
Enquiries:
Ergomed plc | Tel: +44 (0) 1483 503 205 | ||
Stephen Stamp (Chief Executive Officer) | |||
Numis Securities Limited | Tel: +44 (0) 20 7260 1000 | ||
Michael Meade / Freddie Barnfield (Nominated Adviser) | |||
James Black (Joint Broker) | |||
N+1 Singer | Tel: +44 (0) 20 7496 3000 | ||
Aubrey Powell (Joint Broker) | |||
Consilium Strategic Communications - for UK enquiries | Tel: +44 (0) 20 3709 5700 | ||
Chris Gardner / Mary-Jane Elliott Ivar Milligan / Olivia Manser | ergomed@consilium-comms.com | ||
MC Services - for Continental European enquiries | Tel: +49 211 5292 5222 | ||
Anne Hennecke | |||
About Ergomed plc
Ergomed provides specialist services to the pharmaceutical industry spanning all phases of clinical development, post-approval pharmacovigilance and medical information. Ergomed's fast-growing, profitable services offering encompasses a complete suite of specialist pharmacovigilance solutions, integrated under the PrimeVigilance brand, in addition to a full range of high quality contract research and trial management services (CRO). Leveraging its CRO expertise, Ergomed also has a drug development portfolio of co-development partnerships and wholly-owned programmes. For further information, visit: http://ergomedplc.com.
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