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Ergomed

LN: ERGO

Market Cap£500m

Last Close 1004p

Ergomed is a global full-service CRO business with a core focus on the US and EU. It provides Phase I–III clinical services in addition to post-marketing pharmacovigilance (Phase IV) services and is predominantly focused on oncology, orphan drugs, rare diseases and pharmacovigilance.

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Investment summary

Ergomed’s FY21 results showed that adjusted EBITDA of £25.4m was ahead of our estimate of £24.0m and consensus of £23.4m. A strong order book (£239.7m, up 24.2% y-o-y), continued overall business growth and a rapidly improving balance sheet position the company for another solid year of growth. Ergomed recently acquired ADAMAS Consulting Group. ADAMAS is a UK-based quality assurance services provider and will diversify revenue sources (its offerings do not overlap with Ergomed’s). The acquisition should also immediately be accretive to earnings, according to management. The company has been shortlisted for three awards at the 2022 European Mediscience Awards.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2020A 86.4 19.4 14.4 22.8 44.0 26.9
2021A 118.6 25.4 21.6 39.6 25.4 26.1
2022E 140.3 28.1 26.3 42.6 23.6 23.2
2023E 156.3 31.6 29.8 48.1 20.9 21.0
Industry outlook

Innovation in healthcare is driving sales and growth in the number of clinical trials being initiated, as pharmaceutical and biotechnology companies continue to invest substantially. Tight operational control and execution will enable Ergomed to drive market share in high-growth orphan drug trials as well as in larger indications.

Last updated on 30/06/2022
Content on Ergomed
Ergomed – Healthy fundamentals for 2022
Healthcare | research Update | 27 April 2022
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Ergomed – Healthy CRO segment rebound confirmed
Healthcare | research Update | 3 February 2022
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Ergomed – US is now the biggest market in the mix
Healthcare | research Update | 4 October 2021
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Share price graph
Balance sheet
Forecast net cash (£m) 31.4
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (9.2) (25.9) (14.6)
Relative* (3.2) (21.3) (13)
52-week high/low 1540.0p/953.0p
*% relative to local index
Key management
Richard Barfield CFO
Dr Miroslav Reljanović Executive chairman