A trio of City analysts reacted to upbeat results from hVIVO PLC (AIM:HVO), with all three pointing to the upside.
hVIVO earlier today delivered record earnings and provided a confident assessment of the year ahead as demand grows for its specialist infectious disease trials and the company expands into new areas.
Chief executive Mo Khan said 2024 had shown “further evidence of the strength of our long-term sustainable growth model,” as hVIVO reported a 12% rise in annual revenue to £62.7 million and a near 26% jump in EBITDA to £16.4 million.
The London-listed company, which specialises in human challenge trials (studies where volunteers are exposed to viruses in controlled settings), also increased its cash position to £44.2 million and will pay a 0.2p annual dividend.
Earnings per share rose by a third to 1.69p, as more trials ran across its FluCamp facilities and laboratory services.
hVIVO now expects revenue to reach £73 million in 2025, with most of that coming in the second half as recent acquisitions, including two clinical research units in Germany, are fully integrated.
Around 70% of the total is already under contract. The company reiterated its medium-term ambition of growing annual revenue to £100 million by 2028.
hVIVO shares were up 3% in London, changing hands at 15.05p valuing the company at just over £100 million.
In the City, stockbroker Peel Hunt has a ‘Buy’ recommendation with a target price pitched at 34p, suggesting more than 100% upside.
Peel Hunt noted that the financial performance had been heavily disclosed in January’s very positive trading update.
Elsewhere, analysts at Cavendish similarly repeated its 35p price target and said the results were in line with guidance.
“We consider the group now has the capacity to create a robust platform supported by multiple pillars of revenue streams, as a full-service specialist CRO (contract research organisation) which offers attractive dynamics in terms of capabilities, client profile and earnings growth,” Cavendish analyst Mike Mitchell said in a note.
Shore Capital, meanwhile, repeated its ‘Buy’ rating, with analyst Sean Conroy saying “HVO remains a highly cash generative business and the two bolt-on acquisitions completely post-period (CRS and Cryostore) have been comfortably absorbed by the robust cash position.
“Although more acquisitions could be accommodated by the balance sheet and help to accelerate the growth story, in the near-term management have iterated that the focus will be on integrating of the acquired businesses and realising synergies.”
“We believe its ambition to hit £100m revenue in FY28F looks achievable and anticipate margins should begin to materially rebound in FY26F once acquisition synergies have been realised.”