19 Sep 2018
Unaudited Interim Results for the six months ended 30 June 2018

Net service revenue growth of 12% to £21.8 million and management actions implemented to secure profitability improvements

London, UK – 19 September 2018: Ergomed plc (AIM: ERGO) (‘Ergomed’ or the ‘Company’), a company focused on providing specialised services to the pharmaceutical industry, today announces its unaudited interim results for the six months ended 30 June 2018.

Certain comparable numbers for the six months ended 30 June 2017 and figures at 31 December 2017 include restatements which are fully reconciled within this document. The restatements are in relation to the treatment of share based payments reported at the 2017 Year End and the reallocation of certain costs based on the implementation of improved cost reporting.

Stephen Stamp, Chief Executive Officer of Ergomed plc, commented: “The reasons for the disappointing first half were well documented in our Trading Statement at the end of June. Since then, the management team has addressed the Company’s cost base by terminating or re-negotiating vendor contracts and reducing headcount, with an emphasis on non-billable headcount. These measures are expected to have a positive net impact for the remainder of 2018 and an annualized benefit of around £4.0 million next year. Our focus on services is beginning to show promise in terms of the scale of pharmacovigilance opportunities and the number of orphan drug development opportunities and we remain confident in our strategy and ability to deliver future growth.”

Key Highlights

  • Established pharmacoepidemiology business as part of PV offering and integrated PSR
  • Net service fee revenues up 11.8% to £21.8 million (H1 2017: £19.5 million) with inclusion of PSR
  • Gross margin reduced to 0% (H1 2017: 38.4%) reflecting previously announced delay in commencement of some projects
  • Adjusted EBITDA loss of £0.4 million after £0.4 million exceptional items
  • Cash and cash equivalents of £7.4 million as at 30 June 2018 (30 June 2017: £2.4 million)
  • Backlog of £91.4 million contracted revenue as of 30 June 2018 (30 June 2017: £66.2 million)

Recent Developments

  • Cost reduction programme implemented, reducing headcount by approximately 10%
  • Total order intake in July and August amounted to £16.0 million
  • Small acquisition of Harefield Pharmacovigilance Limited completed in September
  • Stuart Jackson was appointed to the Board as Chief Financial Officer
  • Asarina Pharma AB, a co-development partner, completed a public offering ahead of listing on the First North exchange, scheduled for 24 September 2018

Notes:

1 To align with industry practice, Ergomed plc is disclosing reimbursement revenue and reimbursable expenses as part of total revenues and separately from costs of sales respectively. Net service revenues exclude reimbursement revenues.

2 Adjustments are made to EBITDA for share-based payment charge, deferred consideration for acquisition relating to post acquisition remuneration, revaluation of deferred consideration for acquisition, acquisition costs and exceptional items.

Conference call for analysts:

A briefing for analysts will be held at 8.30am BST on 19 September at the offices of Numis Securities Ltd., 10 Paternoster Square, London, EC4M 7LT. There will be a simultaneous live conference call with Q&A.

Conference call details:

Participant dial-in: 08003767922
International dial-in:
+44 (0) 2071 928000
Participant code:
6379908

 

Enquiries:

Ergomed plc Tel: +44 (0) 1483 503 205
Stephen Stamp (Chief Executive Officer)
Stuart Jackson (Chief Financial Officer)
Numis Securities Limited Tel: +44 (0) 20 7260 1000
Michael Meade / Freddie Barnfield (Nominated Adviser)
James Black (Joint Broker)
Consilium Communications – for UK Enquiries Tel: +44 20 3709 5700
Chris Gardner / Mary-Jane Elliott

Matthew Neal / Olivia Manser

ergomed@consilium-comms.com
MC Services – for Continental Europe Enquiries Tel: +49 211 5292 5222
Anne Hennecke

 

About Ergomed plc

Ergomed provides specialist services to the pharmaceutical industry spanning all phases of clinical development, post-approval pharmacovigilance and medical information. Ergomed’s fast-growing, profitable services offering encompasses a complete suite of specialist pharmacovigilance solutions, integrated under the PrimeVigilance brand, in addition to a full range of high quality contract research and trial management services (CRS). Leveraging its CRS expertise, Ergomed also has a drug development portfolio of co-development partnerships and wholly-owned programmes. For further information, visit: http://ergomedplc.com.

Forward Looking Statements

Certain statements contained within the announcement are forward looking statements and are based on current expectations, estimates and projections about the potential returns of Ergomed plc (“Ergomed”) and industry and markets in which Ergomed operates, the Directors’ beliefs and assumptions made by the Directors. Words such as “expects”, “anticipates”, “should”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “projects”, “pipeline” and variations of such words and similar expressions are intended to identify such forward looking statements and expectations. These statements are not guarantees of future performance or the ability to identify and consummate investments and involve certain risks, uncertainties, outcomes of negotiations and due diligence and assumptions that are difficult to predict, qualify or quantify. Therefore, actual outcomes and results may differ materially from what is expressed in such forward looking statements or expectations. Among the factors that could cause actual results to differ materially are: the general economic climate, competition, interest rate levels, loss of key personnel, the result of legal and commercial due diligence, the availability of financing on acceptable terms and changes in the legal or regulatory environment.

These forward-looking statements speak only as of the date of this announcement. Ergomed expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in Ergomed’s expectations with regard thereto, any new information or any change in events, conditions or circumstances on which any such statements are based, unless required to do so by law or any appropriate regulatory authority.