Pharmaceutical services and drug development group Ergomed Plc (LON:ERGO) grew revenue and earnings in the first half of 2017.
The company performed in line with expectations in the first half of the year, with total revenue rising to £22.91mln from £17.55mln, comprising £19.48mln (2016: £12.72mln) of net service revenue and £3.43mln (£4.84mln) of reimbursement revenue.
Ergomed advised shareholders that clinical research services revenues for the full year 2017 are expected to be affected mainly by lower reimbursement revenue due to the stage of projects in progress and deferment of two trials by sponsors.
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In contrast, drug safety monitoring and medical information services continues to exceed expectations and is on track to deliver another year of out-performance.
As at the end of July, the group had a backlog of signed contracts of more than £70mln, up from £60mln or so a year earlier.
Overall demand for services remains robust, the group said, with contracts with a value of £23mln (net of co-development discounts) signed through 31 July 2017.
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Research & development spending rose to £1.07mln from £102,000 the year before.
Underlying earnings, or EBITDA, rose to £1.5mln after £300,000 of share-based payment charges and one-off mergers & acquisitions costs, from £1.2mln the year before, but reported profit before tax fell to £478,000 from £820,000.
Cash in hand as of 30 June 2017 was £2.4mln, down from £9.9mln 12 months earlier.
Net cash outflow from operations was £1.3mln, versus an outflow of £900,000 in the same period of 2016. Net cash outflow included £2.5mln working capital outflows (H1 2016: £2.6 million outflow) including £2.0 million related to an increase in receivables, of which the receivable from CEL-SCI, its co-development partner on the Multikine head and neck cancer candidate, was the largest component.
"It has been a solid first half for Ergomed and we are pleased with both top-line growth and EBITDA for the period,” said Dr Dan Weng, who took over as chief executive officer of Ergomed in June.
“We also had important data read-outs from our co-development partners in the half year and data from our own proprietary product PeproStat is expected in the next few weeks. I am confident that Ergomed is well positioned for further growth, both organic and through acquisition, and of the benefits this will bring to our customers, partners, employees and shareholders," Dr Weng said.
Shares in Ergomed were down 2.4p at 163.1p in mid-morning trading.