Ergomed PLC (LON:ERGO) shares pushed higher after the provider of services to the pharmaceutical sector said 2020 earnings would be ahead of expectations.
The company said it expects revenue for 2020 will be around £86.4mln, up 26.5% on 2019’s £68.3mln and in line with current market expectations.
The positive trading performance seen in both Ergomed's pharmacovigilance (PV) and clinical research organisation (CRO) businesses during the first six months of the year continued through to the year-end and resulted in a strong order book at the start of 2021.
The PV division’s revenue increased by 56% overall to £55.1mln, or by 30% on a like-for-like basis (i.e. excluding the impact of the PrimeVigilance USA acquisition).
CRO revenues eased a tad to £31.3mln from £32.9mln the year before but second-half revenues were up 11.2% on an organic basis compared to the first half of the year and up by 15.2% year-on-year.
The debt-free company ended the year with cash and equivalent balances of £18.9mln, up from £14.3mln a year earlier.
The company said the outlook for 2021 is positive, bolstered by the strong order book and the acquisitions of Ashfield PV (now known as PrimeVigilance USA) and MedSource. These acquisitions considerably strengthened Ergomed's presence in the strategically important US market and globally, further enhancing growth potential in both the PV and CRO businesses, the company said.
"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 USA in both our pharmacovigilance and CRO businesses. Despite the global COVID-19 pandemic, Ergomed performed ahead of market expectations for the full year,” said Miroslav Reljanović, the executive chairman of Ergomed in the trading update.
“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,” he added.
Ergomed shares were up 7.4% at 1,052.5p in early deals.
