|
Edison Investment Research Limited
London, UK, 14 June 2021
Ergomed (ERGO): FY21e EBITDA 'materially ahead' of consensus Yesterday, Ergomed held its annual general meeting (AGM) and provided a high-level year to date trading update (four months to end-April 2021). The company guides to FY21e revenues in line with market expectations (Edison £119.6m; consensus £120.0m). Strong revenue growth has continued in its PrimeVigilance division, in line with prior trends (in FY20 revenues grew by 30%), and its CRO business has seen a further acceleration of growth from H220 (H220 service fee revenues up 13.5% vs H120). This indicates a continued rebound after a tough H120 for the CRO industry due to widespread lockdowns. The most pertinent takeaway is that adjusted EBITDA is now expected to be 'materially ahead of market expectations' in FY21 (Edison £21.7m; consensus £21.9m) due to effective cost management and the Ashfield and MedSource acquisition synergies being realised sooner than expected. We maintain our estimates and valuation of Ergomed (£683m or 1,400p/share) ahead of the more detailed H121 trading update due in July, but note upside potential to our estimates and possible consensus earnings upgrades.
We recently published an outlook report on Ergomed, where we outlined our base case valuation at £683m or 1,400p/share derived from our DCF model, implying an EV/EBITDA multiple of 30.5x based on our FY21 forecasts. We also analysed the sensitivity of our valuation to a set of DCF assumptions (long-term sales growth and profit margins) and found that a bull case would correspond to a valuation of 1,950p/share, while a bear case would correspond to a valuation of 995p/share.
All reports published by Edison are available to download free of charge from its website About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached - across institutions, family offices, wealth managers and retail investors - Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings. Having been the first in-market 17 years ago, Edison now has more than 100 analysts covering every economic sector. Headquartered in London, Edison also has offices in New York, Frankfurt, Amsterdam and Tel Aviv and a presence in Athens, Johannesburg and Sydney. Edison is authorised and regulated by the . Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities. For more information, please contact Edison: Dr Jonas Peciulis +44 (0)20 3077 5728 Dr Sean Conroy +44 (0)20 3077 5700 Learn more at and connect with Edison on: YouTube
Dissemination of a CORPORATE NEWS, transmitted by EQS Group. |
1207320 14-Jun-2021
