City round-up: BAE Systems; Convatec; Rathbones; Nanoco; Evgen Pharma
Defence giant, BAE Systems revealed a record order book and positive sales and profit figures for the first half ending June 30, 2023, today, as it continues to benefit from global security concerns following Russia’s invasion of Ukraine in February 2022.
Turnover was £12.018bn, up from £10.581bn a year ago, while pre-tax profit were £1.198bn, compared with £779m in the same period the previous year.
Free cash flow was £1.070bn, compared with £123m the prior year, and net debt was slashed from £3.135bn a year ago to £1.833bn.
Order intake in the period was £21.1bn, up from £18bn in 2022, and the group’s record order backlog stands at £66.2bn, compared with £52.7bn last year.
The board has declared an interim dividend of 11.5p per share, an 11% improvement.
The group is on its third tranche of a £1.5bn share buyback programme, and has approved a further £1.5bn buyback scheme.
BAE Systems operates factories in Warton and Salmesbury, near Preston, building military aircraft, and a submarine building facility in Barrow.
It employs around 15,000 staff in Lancashire and Cumbria. In December last year the defence giant launched a drive to recruit 2,600 apprentices and graduates across the group.
On March 13 this year, as part of the AUKUS trilateral programme between Australia, the UK and the US, it was announced that BAE Systems will play a key role in helping Australia to acquire its first nuclear powered submarines. The three nations will deliver a trilaterally-developed submarine, based on the UK’s next-generation design, incorporating technology from all three nations. Australia and the UK will operate SSN-AUKUS as their submarines of the future, with construction expected to begin this decade.
CEO, Charles Woodburn, said: “We’ve delivered a strong financial performance in the first half of the year, thanks to the outstanding efforts of our employees.
“Our global footprint, deep customer relationships and leading technologies enable us to effectively support the national security requirements and multi-domain ambitions of our government customers in an increasingly uncertain world.
“With a record order backlog and good operational performance, we’re well positioned to continue delivering sustained growth in the coming years, giving us confidence to continue investing in new technologies, facilities, highly-skilled jobs and in our local communities.”
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Karim Bitar, chief executive of ConvaTec
Deeside-based medical products business, Convatec, announced better half year figures for the six months to June 30, 2023, today, and raised guidance on the back of the latest figures.
Turnover of £1.055bn was up on the previous year’s £1.044bn level, while pre-tax profits of £76m compared with a pre-tax profit of £46.1m a year ago. The interim dividend has been raised from 1.717p per share last year to 1.769p per share.
The group said it now expects organic revenue growth to be between 6-7.5% (previously 5-6.5%) and to achieve an adjusted operating profit margin of at least 20.5% on a constant currency basis (previously at least 19.7%).
During the reporting period the group successfully launched Innovamatrix and ConvaFoamTM in the US with positive clinical feedback. It acquired an innovative anti-infective nitric oxide technology platform with potential applications across categories, and broadened customers and applications in IC – with partnerships with Beta Bionics (iLet insulin pump in the US), AbbVie and Mitsubishi Tanabe (Parkinson’s), Medtronic (780G in the US) and Tandem (Mobi in the US).
Chief executive, Karim Bitar, said: “This performance demonstrates the momentum Convatec is building – revenue growth is accelerating and we are expanding our operating margin, despite ongoing investments to drive future growth and the challenging inflationary back drop.
“Given the strength of performance and the encouraging outlook, particularly in AWC, we are increasing our guidance for the full year.
“We remain focused on further strengthening the business as we execute our FISBE 2.0 strategy. We have now pivoted to sustainable revenue growth and are expanding our operating margin.
“We are increasingly confident of delivering sustainable future growth and an operating margin in the mid-20s.”
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The Port of Liverpool Building
Wealth management group, Rathbones, said it expects its combination with Investec Wealth & Investment to complete next month, in a notice to the stock market this morning.
The firm, with key offices in the Port of Liverpool Building, announced on April 4 this year it had entered into a deal with Investec to create what it says will be the UK’s leading discretionary wealth manager.
It confirmed today that all regulatory clearances in respect of the combination have been received.
It is now anticipated to complete the combination on September 21, subject to the Financial Conduct Authority and London Stock Exchange agreeing to admit the new ordinary shares to the premium listing segment of the Official List and to trading on the London Stock Exchange’s main market for listed securities, and no material adverse change having occurred in respect of either Rathbones or Investec W&I UK.
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Nanoco Group, the Runcorn-based tech company today announced shareholder support in its bid to repel an attempt to oust its board by disgruntled stock holders.
In March this year a shareholder group, led by Tariq Hamoodi, called on senior management to step down, claiming the University of Manchester spin-out company gave misleading information relating to settlement prospects in its intellectual property litigation with Samsung, which eventually saw Nanoco receive a $150m payout from the South Korean electronics giant. Up to £40m of the payout is being returned to shareholders, with the remainder retained for future investment.
Ahead of a general meeting to consider the request, on August 14, Nanoco noted the voting recommendations recently published by Institutional Shareholder Services (ISS) in relation to the forthcoming general meeting, which are to vote against all the resolutions to remove the current board of Nanoco, and to vote against the proposed appointment of director nominees Tariq Hamoodi, Greg Moeller, Dooyong Lee, Benjamin Barnett and Ikchoon Tim Kang.
Nanoco said today that, as previously stated in the group’s 2022 Annual Report & Accounts and in a circular published in relation to the general meeting, the board has indicated it would add additional skills and experience at an appropriate time to match the company’s phase of development and available funding.
The board has already started the search for an additional independent non-executive director with strong sector relevant commercial experience, to support the board as it ramps up production.
It said the nomination committee of the Board is interested in meeting with strong candidates with the requisite skillset and if Mr Eric Achtmann, who ISS has recommended as the only nominee with the closest background to the business and technical experience required to be considered an appropriate non-executive director candidate, wishes to participate in this process, Nanoco would consider his application in the usual way.
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Evgen Pharma
Alderley Park-based drugs development company, Evgen Pharma, and its partner, JuvLife, a division of Juvenescence, have agreed to terminate the patent and know-how license agreement for Evgen’s Sulforadex sulforaphane stabilisation technology.
The exclusive rights will be returned in the fourth quarter of 2023. The upfront payment already received is non-refundable.
Evgen CEO, Dr Huw Jones, said: “JuvLife has undergone a business re-organisation and re-prioritisation exercise.
“The return of these rights enables us to focus on higher value partnerships for pharmaceutical use of our Sulforadex technology, such as the licensing deal concluded with Stalicla in late 2022 and our own oncology programmes.
“The nutraceutical market suffers from lower margins and relative market saturation making it significantly less attractive to us than the pharma market where we continue to concentrate our efforts as the only pharmaceutical grade sulforaphane available worldwide.”
He added: “In other areas of the business, our collaborator recently secured a £900,000 non-dilutive grant for the investigation of SFX-01 in glioblastoma and we continue to work closely with our partner Stalicla on their Autism Spectrum Disorder programme which could generate $160.5m in milestones and double digit royalties.”
As at March 31, 2023, Evgen had cash of £5m. Without including any further milestone payments the current cash runway is to quarter four 2024, with potential future milestones from partner Stalicla SA extending the cash runway into 2025.
