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Ergomed

LN: ERGO

Market Cap£675m

Last Close 1380p

Ergomed is a global full-service CRO business with a core focus on the United States and the 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 proved to be a resilient business in the challenging environment of 2020, which we attribute to a diversified and well-balanced pharma services offering (contract research outsourcing (CRO) and pharmacovigilance). Furthermore, Ergomed’s H121 trading update highlights that operational momentum continues to be strong following its stellar performance in FY20. Total H121 revenues increased by 38.8% to £56.0m (+48.1% CER) with underlying service fees up 28.6% to £47.6m (+37.2% CER). FX headwinds did curtail growth somewhat in H121 reflecting the increasing US$ contribution (now c 50% of the mix after the MedSource acquisition in December 2020). The order book continues to grow at an impressive rate, up 18% from end-2020 with a strong 1.62x book-to-bill ratio for the period.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2019A 68.3 12.5 8.6 19.8 69.7 54.6
2020A 86.4 19.4 14.4 23.7 58.2 37.0
2021E 119.6 24.0 20.2 34.1 40.5 49.4
2022E 136.8 27.1 23.3 39.3 35.1 38.5
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 21/09/2021
Content on Ergomed
Ergomed – Momentum continues with EBITDA upgrades
Healthcare | Update | 11 August 2021
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Share price graph
Balance sheet
Forecast net cash (£m) 29.1
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 16.5 10.4 100.0
Relative* 18.0 10.3 60.8
52-week high/low 1540.0p/736.0p
*% relative to local index
Key management
Richard Barfield CFO
Dr Miroslav Reljanović Executive chairman