Ergomed plc Trading Update (8304S)

TIDMERGO

RNS Number : 8304S

Ergomed plc

28 June 2018

PRESS RELEASE

Trading update

London, UK - 28 June 2018: Ergomed plc (LSE: ERGO) ("Ergomed" or the "Company"), a company focused on providing specialised services to the pharmaceutical industry, announces an update on trading for 2018.

Demand for both clinical research services ("CRS") and drug safety and medical information ("DS&MI") segments remains generally buoyant. However, due to delays in the start-up of some contracts and reductions in scope by sponsors of others, revenue for the first half of 2018 is expected to be below management's expectations and revenue for the full year is now likely to be around 5% less than market consensus for 2018.

The Company continues to invest in line with its stated strategy to position itself as a market leader in pharmacovigilance and orphan drug development segments by 2020. These investments include the addition of project personnel across geographies, the investment in robotic process automation technology to deliver longer-term operational efficiencies and the upgrading of our support capabilities in terms of systems and personnel. The Company expects to continue investing, albeit at a reduced rate, in the second half of 2018.

From a profitability perspective, 2018 will be impacted by delayed revenues and the level of investment being made. The Company believes it is prudent, therefore, to guide investors to expect adjusted EBITDA for 2018 to be only modestly ahead of 2017's adjusted EBITDA of GBP2.8 million.

The Company's backlog, including two contracts on the point of signature, is just over GBP100 million, compared with GBP88 million on 1 January 2018. The Company's cash position remains strong with positive cash flows in the period.

Stephen Stamp, Chief Executive Officer of Ergomed plc said: "This year, we anticipated exceeding market expectations for revenue, allowing us to more than cover the cost of the additional investment required to deliver our strategic goals for 2020. It is unfortunate that delays and reductions in scope of a limited number of contracts has resulted in us investing ahead of the curve. The business overall is in robust health, as demonstrated by a backlog approaching GBP100 million, and we are confident 2018 will provide a solid foundation for future growth."

- Ends -

Enquiries:

 
 Ergomed plc                                        Tel: [phone] 
                                                                      205 
 Stephen Stamp (Chief Executive Officer) 
 
 Numis Securities Limited                            Tel: [phone] 
                                                                     1000 
 Michael Meade / Freddie Barnfield (Nominated 
  Adviser) 
 James Black (Joint Broker) 
 
 N+1 Singer                                          Tel: [phone] 
                                                                     3000 
 Aubrey Powell (Joint Broker) 
 
 Consilium Strategic Communications                  Tel: [phone] 
  - for UK enquiries                                                 5700 
 Chris Gardner / Mary-Jane Elliott            [e-mail] 
  Ivar Milligan / Olivia Manser 
 
 MC Services - for Continental European            Tel: [phone] 
  enquiries 
 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 (CRO). Leveraging its CRO expertise, Ergomed also has a drug development portfolio of co-development partnerships and wholly-owned programmes. For further information, visit: http://ergomedplc.com.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

TSTZMGZVMNLGRZZ

(END) Dow Jones Newswires

June 28, 2018 02:01 ET (06:01 GMT)