May 23: AIM Company of the week - Vindon Healthcare plc
Vindon Healthcare PLC
Report updated: 9th May 2007
INTRODUCTION
Vindon Healthcare listed on AIM in April 2005, raising £300,000 at 10p per share in exchange for shares representing 3.8% of the enlarged share capital.
Vindon Healthcare (which went through several name changes before acquiring its current name) was formed in April 2003 as a cash shell to attract companies seeking Admission to AIM. On 25th February 2005, it raised £1.2 million and on 28th February 2005 acquired Vindon Scientific Ltd.
Founded in 1967, Vindon Scientific manufactures controlled environment cabinets for the pharmaceutical, life sciences and food sectors - its core competence is the management of temperature, light and humidity controlled storage requirements. It also provides specialist controlled storage facilities for pharmaceutical companies - Vindon plans to expand the range of products and services which it offers its customers. Its clients include Glaxo SmithKline, AstraZeneca and Pfizer.
UPDATES
The maiden interim results to June 2005 showed sales of £1.1 million, pre-tax profit of £198,000 and EPS of 0.23p. Research shows a need for a Disaster Recovery Storage service - the company is launching such a service, SENTINEL, at an exhibition in September 2005. Tightening of the regulatory regime for pharmaceutical companies (eg widening the scope of stability storage trials into raw materials) is expected to benefit the company.
The final results to December 2006 (comparatives are for 10 months of trading) showed sales of £3.8 million (2005: £2.6 million), pre-tax profit of £982,000 (2005: £626,000) and adjusted EPS of 0.84p (2005: 0.53p) - compared with 2005 pro-forma results for 12 months, sales, gross profit and operating profit each showed growth of between 22% and 24%. The company reported that storage facilities increased by 250% to 330 cu metres; value added service revenues (comprising storage, validation and maintenance) represented 47% of sales - the commitment for 2007 is £1.7 million; gross margin was 67% (2005: 61%); operating margin was 28.8% (2005: 28.5%).
In May 2007, £2.0 million was raised at 20p per share in exchange for shares representing 11.3% of the enlarged share capital. The purpose is to to find or build a new facility to replace the current premises - this is anticipated to take place during Q1 2008 - discussions are under way regarding a potential site.
Research Standing
An interesting business achieving attractive growth and margins - its storage business converts its products into a service producing recurring revenues. In 2006, 81% of sales were in the UK - part of the growth strategy is to expand into overseas markets.
The company broker's note dated 20th March projects EPS of 1.1p for 2007 and 1.4p for 2008 representing P/Es of 21.4 and 16.8 respectively based on the share price of 23.5p at 9th May.
Report updated: 9th May 2007
INTRODUCTION
Vindon Healthcare listed on AIM in April 2005, raising £300,000 at 10p per share in exchange for shares representing 3.8% of the enlarged share capital.
Vindon Healthcare (which went through several name changes before acquiring its current name) was formed in April 2003 as a cash shell to attract companies seeking Admission to AIM. On 25th February 2005, it raised £1.2 million and on 28th February 2005 acquired Vindon Scientific Ltd.
Founded in 1967, Vindon Scientific manufactures controlled environment cabinets for the pharmaceutical, life sciences and food sectors - its core competence is the management of temperature, light and humidity controlled storage requirements. It also provides specialist controlled storage facilities for pharmaceutical companies - Vindon plans to expand the range of products and services which it offers its customers. Its clients include Glaxo SmithKline, AstraZeneca and Pfizer.
UPDATES
The maiden interim results to June 2005 showed sales of £1.1 million, pre-tax profit of £198,000 and EPS of 0.23p. Research shows a need for a Disaster Recovery Storage service - the company is launching such a service, SENTINEL, at an exhibition in September 2005. Tightening of the regulatory regime for pharmaceutical companies (eg widening the scope of stability storage trials into raw materials) is expected to benefit the company.
The final results to December 2006 (comparatives are for 10 months of trading) showed sales of £3.8 million (2005: £2.6 million), pre-tax profit of £982,000 (2005: £626,000) and adjusted EPS of 0.84p (2005: 0.53p) - compared with 2005 pro-forma results for 12 months, sales, gross profit and operating profit each showed growth of between 22% and 24%. The company reported that storage facilities increased by 250% to 330 cu metres; value added service revenues (comprising storage, validation and maintenance) represented 47% of sales - the commitment for 2007 is £1.7 million; gross margin was 67% (2005: 61%); operating margin was 28.8% (2005: 28.5%).
In May 2007, £2.0 million was raised at 20p per share in exchange for shares representing 11.3% of the enlarged share capital. The purpose is to to find or build a new facility to replace the current premises - this is anticipated to take place during Q1 2008 - discussions are under way regarding a potential site.
Research Standing
An interesting business achieving attractive growth and margins - its storage business converts its products into a service producing recurring revenues. In 2006, 81% of sales were in the UK - part of the growth strategy is to expand into overseas markets.
The company broker's note dated 20th March projects EPS of 1.1p for 2007 and 1.4p for 2008 representing P/Es of 21.4 and 16.8 respectively based on the share price of 23.5p at 9th May.
May 9: Vindon's £2m to move
OLDHAM-based Vindon Healthcare has raised £2m to fund a move to bigger premises.
The AIM-listed firm has placed 10m shares with institutional and individual investors and plans to use the proceeds to finance new facilities during the early part of next year.
Negotiations are under way over a possible site in Rochdale although no agreement has yet been signed.
Chairman Liam Ferguson said: "We are very encouraged by the significant interest shown in the company and welcome our new investors. The placing will significantly strengthen the company's balance sheet and create the necessary resources to pursue our strategy."
The shares ticked up 0.25p, or just over one per cent, to 23.5p after the announcement.
Vindon, which is currently based at Kiln Green, Diggle, manufactures blood banks, storage chambers, fridges and freezers for clients in the pharmaceutical, food and life sciences sectors. In addition, it stores drugs at various temperatures and degrees of humidity for customers such as AstraZeneca and GlaxoSmithKline as part of their trials for new products such as pills and inhalers.
This is a growing part of Vindon's business and has necessitated the move. Drugs typically need to be stored for up to five years and Vindon receives long-lasting contracts on that basis. Finance director Martin Burrill said: "We are bursting at the seams. We have some temporary facilities at another site in Oldham but we are looking for new premises which will significantly increase our capacity. We will be staying in the area."
He said Vindon, which employs 42 people, was looking to triple its capacity.
The company posted sales of £3.84m for 2006 and profits of £1.06m, but analysts are forecasting a rise in turnover to £4.47m this year, with profits of £1.26m.
A storage facility has opened near Waterford in the Republic of Ireland and a sales team in the United States has secured Vindon's first order.
Around half of Vindon's turnover comes from manufacturing, with the rest from its storage, repairs and maintenance operations.
Kevin Feddy ©MEN
