Consort Medical's (LON:CSRT) H117 interims evidenced underlying earnings growth, ongoing margin expansion and increased diversity in the business and customer base. At Bespak significant contract wins and recent and potential near-term launches support longer-term growth. Increased capacity utilisation and the serialisation opportunity could drive Aesica operating margin towards the double-digit target. M&A could supplement Consort’s existing product, competency or geographic capabilities. Nevertheless, organic growth is supported by a growing pipeline, with 16 disclosed Bespak projects and an ‘Innovation funnel’ of 11 early-stage development/feasibility projects.
Bespak: Pipeline and business development delivery
Bespak revenue growth (+4.3% to £58.9m) was supported by solid and diversifying product and service revenues (c 25% is non-respiratory). EBIT margin was +60bp to 20.7%. The Syrina/VapourSoft master development agreement and UCB Cimzia autoinjector (INJ570) approval should add impetus to the injectables franchise. In respiratory, the launch of VAL100 (AstraZeneca) and potential DEV610 (Mylan (NASDAQ:MYL)) approval could generate meaningful revenues and diversify customer dependency.
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