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Ergomed says full-year earnings to be “materially ahead of market expectations”

The group, which provides services to the pharma industry such as contract research and drug monitoring, gave the update after assessing its first-half performance

Ergomed PLC -

Ergomed PLC (LON:ERG) shares rose on Tuesday after the firm said it has made “exceptional progress” and told investors underlying earnings (EBITDA) for the full-year would be “materially ahead of market expectations”.

The group, which provides services to the pharma industry such as contract research and drug monitoring, gave the update after assessing its first-half performance – a period in which revenues grew by 14.8% to £40.4mln.

READ: Ergomed’s PrimeVigilance inks collaboration deal to accelerate intelligent automation strategy

Like-for-like service fee revenue was up 18% year-on-year in the first six months, while the order book expanded by 22% to £151.4mln in the period from January 1, 2020, providing “high visibility” for the remainder of the year “and beyond”.

Debt-free, the company had £14.1mln in the bank as of June 30, 2020.

"Ergomed has delivered exceptional progress both operationally and financially during the first half of the year,” chairman Miroslav Reljanović said in the trading update.

The star performer was PrimeVigilance, the pharmacovigilance business that monitors drugs after they are licensed. It saw its top-line grow by 62% to £26.1mln. The contract research arm posted a modest decline in turnover in the period to £11.1mln.

Ergomed said it was becoming a recognised provider of coronavirus (COVID-19) research support via both parts of the business.

At the beginning of the pandemic, Ergomed said it had safely adapted to the new world with no disruption to the business and no redundancies or furloughed staff.

Indeed, momentum was maintained into the lockdown period of the second quarter of 2020.

Ergomed “continued to grow strongly, achieve its sales targets, build its order book and bolster its robust financial platform”, investors were told.

“We have responded strongly to the challenges of the Covid-19 pandemic, maintaining momentum and improving margins with EBITDA expected to be materially ahead of market expectations for the full-year,” said chairman Reljanović.

“This excellent performance has strengthened the platform from which to deliver on our strategy to provide specialist services in key market sectors, to invest for organic growth and efficiency, and to make disciplined acquisitions to achieve geographic expansion and drive increased sales and enhanced profitability."

In morning trading, Ergomed shares were 9% higher at 585p.

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Quick facts: Ergomed PLC

Price: 930 GBX

AIM:ERGO
Market: AIM
Market Cap: £453.08 m
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