£528.9m market cap

1085p last close

Ergomed is a global full-service contract research outsourcing 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.

Investment summary

Ergomed’s FY20 results released today showed that adjusted EBITDA of £19.4m was 4.2% ahead of our estimate. This was a positive surprise after we had increased it following the trading update in January 2021. Management has maintained its near-term guidance therefore we keep our estimates unchanged. A strong order book (£193m, up 55.5% from the end of FY19), continued overall business growth and a strong balance sheet positions Ergomed for another solid year of growth. Cash of £19.0m and access to unutilised credit facilities of £30m mean that the company can invest in organic growth and look for additional strategic acquisitions. We have increased our valuation to £682m or 1,400p/share.

Y/E Dec
Revenue (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2019A 68.3 12.5 8.6 19.8 54.8 42.9
2020A 86.4 19.4 14.4 23.7 45.8 29.1
2021E 119.6 21.7 18.0 30.4 35.7 37.6
2022E 136.8 23.2 19.4 36.0 30.1 23.6
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 13/04/2021
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Share price graph
Balance sheet
Forecast net cash (£m) 29.5
Forecast gearing ratio (%) N/A
Price performance
Actual (12.5) (2.7) 138.5
Relative* (14.5) (5.9) 95.7
52-week high/low 1295.0p/367.5p
*% relative to local index
Key management
Miroslav Reijanovic CEO
Richard Barfield CFO