Clinigen Group plc - Year end trading update
Year end trading update
· Revenues are expected to increase by at least 17% on a net constant currency basis1 and at least 13% on a gross reported basis
· Gross profit is expected to increase by at least 20% on both reported and constant currency basis2 and at least 9% on organic basis3
· Adjusted EBITDA growth of at least 29% with organic EBITDA growth ahead of organic gross profit growth
· Cash conversion returned to normal levels in the H2 with net debt at
· Reiterate medium term organic gross profit growth guidance of 5% - 10% - with FY21 to be at the lower end due to the impact of COVID-19 and an expected launch of a generic Foscavir in the EU
"We have delivered a robust performance, showing strong organic growth despite the difficult trading conditions in the last few months of the financial year and in line with our previous guidance.
"Our international platform and balanced portfolio of complementary services and products have shown real resilience. Cash generation also improved meaningfully in the H2, reverting back to historical levels.
"We continue to see organic growth in line with our medium term guidance at this early stage of the new financial year, despite COVID-19 and expected competitive pressure to Foscavir. As we look beyond FY21, we see growth significantly accelerating as we onboard new asset Erwinase and we continue to gain share in the end-markets we serve."
During the COVID-19 pandemic, Clinigen has implemented a range of measures to prioritise keeping its employees safe, including extensive home working. The Group has worked closely with its pharmaceutical clients as well as its hospital pharmacist customers to ensure that the supply of critical medicines to patients on a global basis continues uninterrupted.
During the fourth quarter, the Group experienced more meaningful disruption to its activities from COVID-19, but continued to deliver good progress overall. Clinical Services was impacted by clinical trials being delayed or cancelled, whilst both Commercial Medicines and Unlicensed Medicines saw reduced volume demand as treatments in the hospital setting, particularly for oncology, slowed. However, the Group quickly pivoted activities to support efforts against the pandemic, resulting in material contract wins, whilst containing costs to lessen the impact from a lower top line performance.
Clinigen estimates that the impact of COVID-19 was at least
In Commercial Medicines, there were good performances across the portfolio, albeit growth in the final quarter was impacted due to COVID-19 disruption. Foscavir performed well in spite of increased competition from a novel product. The Group is now aware of a generic approval in the EU, but has not seen any formal product launch.
It is not possible to quantify precisely the financial impact that the launch of a generic alternative to Foscavir will have on Clinigen's revenues generated from Foscavir, or how quickly such an impact would take effect. However, the Board has long anticipated the generic threat and are enacting its strategy to mitigate loss and expect the impact to be captured within its medium term organic gross profit guidance. The signing of Erwinase in
Within Unlicensed Medicines, Global Access performed well even though there were continuing headwinds in the UK Specials business. Contracting for exclusive supply agreements was delayed by the pandemic, but the Group expects this to improve materially in FY21 with a pipeline of near-term opportunities under evaluation. In Managed Access, as highlighted in the half year results, the performance was weaker despite an improved second half that was boosted by a material number of program wins - the highest in the Group's history.
Within Clinical Services, whilst the pandemic led to a reduction in activity with clinical trials being delayed or cancelled, the performance of both CTS and CSM was encouraging with both broadly flat in organic terms against a market backdrop that the Group believes was c.30-50% down in Q4. Within CSM in particular, the direct to patient model was a clear differentiator against competitors. More COVID-19 related work has been won than has been delayed or cancelled due to the pandemic with notable large contract wins in the final months of the financial year.
Outside of the divisions, good progress was made with the Group's ERP project, ClinigenOne, with digitization expected in FY21 and further steps on integration across the broader Group thereafter.
As expected, the positive cash generation of the Group reverted back to historical levels in H2. Clinigen continues to expect an unwind of the temporary working capital headwinds seen in H1 over FY21. The contingent consideration of up to
Net debt has marginally decreased relative to the H1, at
The Group reiterates its aim to paydown and maintain net debt within a range of 1.0x to 2.0x EBITDA on an ordinary basis within 12-18 months.
Year end results
The Group expects to publish its final results for the year ended
1 Net revenues on a constant currency basis evaluates the Group's revenue performance by applying the prior period's actual exchange rate to this period's result excluding the impact of pass through costs in the Managed Access business.
2 Constant currency evaluates growth by applying the prior period's actual exchange rate to this period's result.
3 Year on year comparisons referred to as 'organic' are a measure of growth on a constant currency basis, excluding the impact of business and product acquisitions. Acquisitions completed in the previous financial year are included on a like for like basis including the results for the acquisition where it is included in the comparable historical period. Organic growth is presented to aid the reader's understanding of the underlying performance of the business. On a proforma basis the best estimate is at least 8% for organic gross profit growth.
4 Bank covenant leverage is calculated by dividing adjusted EBITDA of the Group for the last 12 months, excluding the impact of IFRS 16, by net debt at the period end. Adjusted EBITDA includes the EBITDA from the businesses and assets acquired during the last 12 months, including on a pro forma basis the year prior to it becoming a member of the Group.
- Ends -
For further information, please contact:
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Tel: +44 (0) 1283 495 010
Matt Parrish, Head of Investor Relations
J.P.Morgan Cazenove - Nominated Adviser & Joint Broker
Tel: +44 (0)20 7742 4000
James Mitford / Hemant Kapoor
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Tel: +44 (0)20 7653 4000
Marcus Jackson / Elliot Thomas
Adrian Duffield / Melanie Toyne Sewell / Phillip Marriage
Tel: +44 (0)20 7457 2020
Clinigen now has over 1,100 employees across five continents in 14 countries, with supply and distribution hubs and operational centres of excellence in key long-term growth regions. The Group works with 22 of the top 25 pharmaceutical companies; interacting with over 15,000 registered users across over 100 countries, shipping approximately 6.4 million units in the year.
For more information on Clinigen, please visit www.clinigengroup.com.
This announcement contains certain projections and other forward-looking statements with respect to the financial condition, results of operations, businesses and prospects of
The information contained in this statement has not been audited and may be subject to further review.
This information is provided by RNS, the news service of the
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