Clinigen Group Plc

Clinigen Group Plc (CLIN) is a UK based Pharmaceuticals & Biotechnology company which is involved in the activities related to distribution, sale and management of pharmaceutical products. The company has divided its operations into three reportable segments being Clinical Trial Services, Unlicensed Medicines and Commercial Medicines.

Recent News
On 19^th September 2019, Clinigen Group announced its full year results ending 30^th June 2019.

Financial Highlights – Financial Year 2019 (30^th June 2019, £, million)

(Source: Annual Report, Company Website)

For the financial year ending 30^th June 2019, the company’s revenue was up by 20 per cent (reported basis) to £456.9 millionas against £381.2 million in FY2018. The increase in the revenue was driven by an increase in the performance of Commercial Medicines and Clinical Trial Services business segments. The adjusted gross profit was up by 30 per cent to £182.3 millionin FY2019 as against £140.1 million in FY2018. The company’s adjusted operating profit increased to £95.8 million in FY2019 from £73.2 million in FY2018. With the increase in the administrative expenses for the period, the statutory operating profit declined to £24.4 million in FY2019 from £41.5 million in FY2018. The company’s adjusted PBT (Profit before tax) increased to £87.9 million in FY2019 from £68.7 million in FY2018. The company’s reported PBT (Profit before tax) declined to £12.3 million in FY2019 from £35.9 million in FY2018. The company’s reported PAT (Profit after tax) declined to £5.2 million in FY2019 from £27.4 million in FY2018. The basic earnings per share were at 4 pence in FY2019 versus 22.9 pence in FY2018. The diluted earnings per share were at 4 pence in FY2019 versus 22.5 pence in FY2018.

Share Price Performance

Daily Chart as at October-01-19, after the market closed(Source: Thomson Reuters)

On 1 October 2019, (after the market closed), Clinigen Group Plc shares ended at GBX 860.00, down by 0.46per cent against its previous day closing price. Stock's 52 weeks High and Low is GBX 1,069.00/GBX 716.00.

Valuation Methodology

*Peers: Hikma Pharmaceuticals Plc, Eurofins-Cerep SA, Boiron SA, BB Biotech AG and Eurofins Scientific SE.

Conclusion
On a reported basis, the company’s financial performance has declined,whereas, on an adjusted basis, the company’s financial performance improved in the financial year 2019. Both the top-line and the bottom-line performance expanded for the current period.

The company is looking forward to attaining market-leading positions through acquisitions of business and products, which is also helping the company to increase its geographical footprint and commercial infrastructure. The strong balance sheet is facilitating the company to be in a good position to drive growth in all businesses in the coming years.

Over the course of 4 years (FY14 - FY18), the company’s revenue surged from £126.6 million in FY14 to £381.2 million in FY18. Compounded annual growth rate (CAGR) stood at 31.73 per cent.

Based on the decent prospects and supported by valuation done using the above method, we have given a "Speculative Buy" recommendation at the closing price of GBX 860 (as on 1^st October 2019), with single digit upside potential, based on 17.00x NTM Price/Earnings (approx.) on FY20E earnings per share (approx.).
 

Advanced Oncotherapy Plc

Advanced Oncotherapy Plc (AVO) is a Health Care Equipment & Services company focused on providing services related to radiotherapy systems for the treatment of cancer using proton therapy technology. The company is engaged in the development of cancer therapy device using proton beam called LIGHT (Linac Image Guided Hadron Technology). The group’s R&D centre is located in Switzerland and Geneva.

Recent News
On 30th September 2019, Advanced Oncotherapy announced its interim results ending 30th June 2019.

Financial Highlights – H1 Financial Year 2019 (30^th June 2019, £)

(Source: Interim Report, Company Website)

In the first half of the financial year 2019, the company remained in the development phase hence did not generate any revenues. The company’s operating loss stood at £11,005,001 in H1 FY2019as against an operating loss of £11,307,101 in H1 FY2018. The LBT (Loss before tax) stood at £11,590,718 in H1 FY2019 versus an LBT (Loss before tax) of £11,480,340 in H1 FY2018. The LAT (Loss after tax) attributable to shareholders stood at £11,240,112 in H1 FY2019 versus a LAT (Loss after tax) of £11,480,340 in H1 FY2018. As on 30th June 2019, the company’s cash reserves stood at £3,592,879 as against £3,321,835 as on 30th June 2018. The company’s total assets for the H1 FY2019 was £79,749,451 versus £54,737,524 in H1 FY2018.

Share Price Performance

Daily Chart as at October-01-19, after the market closed(Source: Thomson Reuters)


On 1 October 2019, (after the market closed), Advanced Oncotherapy Plc shares ended at GBX 41.00, down by 2.38per cent against the previous day closing price. Stock's 52 weeks High and Low is GBX 52.00/GBX 31.00.

Conclusion
Since the company is in the development phase, it doesn’t generate any revenues, and all the operations are financed through its cash reserves and grants. The profitability margins have remained stagnant or declined but improved significantly as compared to the last year data.

The company operates in a challenging environment which requires continuous investment, sometimes at the cost of profitability, to stay ahead of competitors. The Proton therapy is presently available in 209 treatment rooms globally which are less and is not helping the company to generate enough revenue to run operations smoothly.

Based on the above factors, we recommend investors to “Avoid” taking fresh positions at the closing price of GBX 41 (as on 1^st October 2019). 
 
*All forecasted figures and Peers information has been taken from Thomson Reuters.
*The “Speculative Buy” recommendation is valid for the current price as on Oct-02-19.

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