Ergomed PLC (AIM:ERGO, ETR:2EM) hit the right notes in today’s audited interim earnings call, with the pharmaceuticals sector-focused specialised services group increasing revenues 10% year on year to £76.7 million and underlying earnings 14% to £15.7 million.
Gross margins remained strong at over 40%, with profit after tax staying put at £7.3 million.
The results follow this month's announcement that Ergomed will be taken over by private equity firm Permira in a £703 million deal, which is expected to conclude in the first quarter of 2024.
In the meantime, Ergomed’s commercial investments have paid off, with new business pipeline growth reaching 30% in the first half of 2023 and the order book growing 9% to £310 million.
Basic earnings per share increased 7.7% to 21.9p year on year.
Some 78.7% of Ergomed’s adjusted earnings were converted to cash. As of 30 June, Ergomed was debt free with £26 million in cash and cash equivalents on the books.
Ergomed’s two main service lines, clinical research services (CRO) and PrimeVigilance, grew at roughly equal measures, respectively up 10% to £38 million and 9% to £38.7 million.
Executive chairman Dr Miroslav Reljanović stated: "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.
"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."
Reljanović noted that Ergomed has maintained its focus on “prudent cost management, and executing our disciplined approach to M&A… We expect to deliver on our expectations for financial results for 2023, and we look forward with confidence to the rest of this year and beyond”.