Nothing Venntured…

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Venn Life Sciences (AIM: VENN),  report interim’s  which are likely to build on the 135% revenue growth to EU 11.47m reported in May for the December year end.

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It is a growing Contract Research Organisation providing drug development, clinical trial management and resourcing solutions to pharmaceutical, biotechnology and medical device clients. The interims are reported next Wednesday, 28th and could show its first PBT and so building on the first positive EBITDA reported last time.

 

The acquisition of Kinesis made in 2015 for £3.7m, is contributing to the strong rate of business wins. This continued in May with a Eu2.8m win from a European Biotechnology client involving a drug trial Phase 2 study for Multiple Sclerosis involving patients in six countries across Europe and starts next month. This is in addition to the eu4.4m already booked as the interims should show synergistic benefits of repeat business, client referals and business wins from prospecting. This could be the result of its hands-on approach and consistent delivery of high quality work on budget, or just luck.  The business is more tech than people intensive which increases the scalability.

 

Venn operate from sites in France, Germany, the Netherlands, the UK and Ireland with further organic geographic growth targeted. This year’s strategy is to integrate the  full list of services offered to clients and increase cross selling opportunities from the acquisitions made over the last two years. A profit of £1.35m is forecast of the year to December 2016, which would give an EPS of 2.7p and a relatively moderate P/E for a Healthcare and Life Science business of 12.5x. Hybridan, the House Broker has a price target of 48p.

 

Financials

Net cash improved to eu3.8m from eu0.8m at the finals and a further improvement is likely.

 

 

Trading Strategy

There is an early stage Venture Capitalist with a 21% stake but this should not put any one of buying ahead of the interims next week as there could be plenty of buyers of the stake once Venn in profitable…….

 

 

 

Venn Life Science (LSE:VENN)

28.25p (28.25-29)

Mkt Cap £17.2m

Next Results: Interims Wed 28th Sept

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