Significant turnaround in profitability in second half, coupled with strong sales of new business and contracted backlog, positions Ergomed well for 2019
Guildford, UK – 31 January 2019: Ergomed plc (LSE: ERGO) ('Ergomed' or 'the Company'), a company focused on providing specialised services to the pharmaceutical industry, today provides a trading update for the year ended 31 December 2018.
Net Service Fee revenues for 2018 are expected to be approximately £46.5 million (2017: £39.6 million), in line with current market expectations, prior to any impact of IFRS 15. Growth in both pharmacovigilance (PV) and CRO is anticipated to be broadly in line with expectations, with the PV business continuing to perform strongly and show growth of more than 20%.
In terms of profitability, the second half of the year has seen strong operational performance and, with the cost reduction programme implemented by management having an impact, adjusted EBITDA is also expected to be in line with market expectations.
Driven by sales of new business of £76 million in 2018 (2017: £54 million), Ergomed’s order book remains robust and it is expected that the backlog at the end of 2018 will be approximately £106 million (2017: £88 million, both including reimbursement revenues), prior to any IFRS 15 adoption adjustments.
IFRS 15 (revenue recognition) will be adopted with effect from 1 January 2018. At the time of presenting the Preliminary Results a clear reconciliation of the non-cash accounting adjustments associated with revenue and backlog impacts will be provided.
Dr Miroslav Reljanovic, Executive Chairman of Ergomed, said: “We have worked hard to deliver significantly improved results in the second half in 2018. Based on our contracted backlog and re-aligned cost base, I am optimistic we can deliver our 2019 growth targets. We continue to execute on our strategy of focusing on services, specifically on the opportunities in pharmacovigilance and orphan drug development.”