Don’t be fooled by the reported revenue numbers in Allergy Therapeutics PLC (AIM:AGY)’s half-year reports is the message from house broker finnCap.
The six-month trading update covering the second half of 2021 reflects the discontinuation of non-core products, ongoing COVID-19-related headwinds (principally in Germany and Italy), exchange-rate headwinds and product phasing issues, the broker explained, referring to a 10% reported year-on-year fall in revenues to £48.7mlm.
“Underlying like-for-like growth, however, was 3% at constant exchange rates (CER). Period-end cash was £41.4mln, which implied a c.3% increase (+£1.mln) in underlying cash flows in the period,” finnCap noted.
The broker has reduced its full-year revenue forecast by 9% for the current fiscal year £77.5mlm to reflect these headwinds Allergy faces and has adjusted its pre-research & development underlying earnings into line with the market consensus of earnings before interest and tax (EBIT) of roughly £5.6mln, “given management comments that cost savings in the second half should offset the sales shortfall”.
Confirmation that an investigational new drug application has been submitted to the US Food and Drug Administration for the VLP Peanut allergy treatment Phase I trial and that Phase I headline results should be brought forward to the first half of fiscal 2023 due to trial design changes are positives, the broker asserted.
House broker finnCap left its target price of 65p unchanged following the half-year results. Allergy currently trades at around 30p.