Shares Magazine - May 24, 2018

GREAT IDEAS

24 May 2018 | SHARES | 13

ΨΘďŶďLJϮϬϮκ͘
hƐŝŶŐĚĂƚĂĂŶĚƐŽƉŚŝƐƟĐĂƚĞĚ
ƐƚĂƟƐƟĐƐ͕ƌŐŽŵĞĚĐĂŶ
determine if any there are any
ƐŝĚĞĞīĞĐƚƐŽƌƉŽƚĞŶƟĂůĚƌƵŐ
ŝŶƚĞƌĂĐƟŽŶƐ͕ƉŽƐƐŝďůLJůĞĂĚŝŶŐ
ƚŽĚƌƵŐƌĞůĂďĞůůŝŶŐ͘
dŚĞŽƵƚĐŽŵĞĐŽƵůĚĞǀĞŶůĞĂĚ
ƚŽĂƌĞĐŽŵŵĞŶĚĞĚǁŝƚŚĚƌĂǁĂů
of a product if it is deemed
to be unsafe.

FUND MANAGER FANS
/ŶǀĞƐƚŵĞŶƚƚƌƵƐƚ^ƚƌĂƚĞŐŝĐƋƵŝƚLJ
Capital (SECͿŚŽůĚƐƌŐŽŵĞĚŝŶ
ŝƚƐƉŽƌƞŽůŝŽ͘&ƵŶĚŵĂŶĂŐĞƌ:Ğī
,ĂƌƌŝƐďĞůŝĞǀĞƐƚŚĞĐŽŵƉĂŶLJ͛Ɛ
new strategy is a step in the right
ĚŝƌĞĐƟŽŶĂƐƉŚĂƌŵĂĮƌŵƐĂƌĞ
outsourcing more work to meet
ŝŶĐƌĞĂƐŝŶŐƌĞŐƵůĂƚŽƌLJŚƵƌĚůĞƐ͘
,ĂƌƌŝƐŇĂŐƐƚŚĂƚƌŐŽŵĞĚ͛Ɛ
chairman Peter George used to
ďĞKĂƚƐƵĐĐĞƐƐĨƵůƐĞƌǀŝĐĞƐ
group Clinigen (CLIN: AIM),
ĂŶŽƚŚĞƌƐƚŽĐŬŝŶŚŝƐƉŽƌƞŽůŝŽ͘
ƌŐŽŵĞĚĂůƐŽĨĞĂƚƵƌĞƐŝŶ

ŝǀŝŶŐďƌŝĚŐĞh<DŝĐƌŽĂƉ
&ƵŶĚ͛Ɛ;'ϬϬρρ^εyεΘͿ

ƉŽƌƞŽůŝŽ͘&ƵŶĚŵĂŶĂŐĞƌ<ĞŶ

tŽƩŽŶƐĂLJƐƌŐŽŵĞĚŝƐĂŚŝĚĚĞŶ

ŐĞŵĂƐŝƚƐďƵLJĂŶĚďƵŝůĚƐƚƌĂƚĞŐLJ

ĂŶĚĨŽĐƵƐŽŶƉŚĂƌŵĂĐŽǀŝŐŝůĂŶĐĞ

ĐŽƵůĚďĞĂƌĞĐŝƉĞĨŽƌƐƵĐĐĞƐƐ͘

tŽƩŽŶďĞůŝĞǀĞƐŝĨƚŚĞĐŽŵƉĂŶLJ

ĐŽŶƟŶƵĞƐƚŽŐĂŝŶĐƌŝƟĐĂůŵĂƐƐŝƚ

ĐŽƵůĚƉŽƚĞŶƟĂůůLJďĞŶĞĮƚĨƌŽŵĂ

ƌĞͲƌĂƟŶŐĂŶĚďĞƐĞĞŶĂƐĂƐƚƌĂƚĞŐŝĐ

ĂƐƐĞƚŝŶƚŚĞƐĞĐƚŽƌŽǀĞƌƟŵĞ͘

Savvy investors have

started to become aware of

ƌŐŽŵĞĚ͛ƐƉŽƚĞŶƟĂůǁŝƚŚƚŚĞ

ƐŚĂƌĞƐŚĂǀŝŶŐƌĞĐĞŶƚůLJŚŝƚĂŶ

ĂůůͲƟŵĞŚŝŐŚŽĨϮϮΘƉ;ϮϭDĂLJͿ͘

ERGOMED’S CASH FLOW PROFILE

2017a 2018e 2019e 2020e

dŽƚĂů άϭ͘ϯŵ άϯ͘Θŵ άΘ͘ϳŵ άϭϬ͘Θŵ

tŽƌŬŝŶŐĐĂƉŝƚĂůŵŽǀĞŵĞŶƚ ;άϭ͘ϬŵͿ ;άϭ͘ϳŵͿ ;άϭ͘κŵͿ ;άϭ͘ϯŵͿ

KƉĞƌĂƟŶŐĐĂƐŚŇŽǁ άϬ͘κŵ άϮ͘ϭŵ άϳ͘ϯŵ άε͘ρŵ

Ta x ;άϬ͘κŵͿ ;άϬ͘ϭŵͿ ;άϬ͘ρŵͿ ;άϭ͘ϮŵͿ

/ŶƚĞƌĞƐƚ άϬ͘Ϭŵ ;άϬ͘ϯŵͿ άϬ͘Ϭŵ άϬ͘Ϭŵ

ĂƐŚŇŽǁĨƌŽŵŽƉĞƌĂƟŽŶƐ άϬ͘Ϭŵ άϭ͘Θŵ άς͘Θŵ άΘ͘ϯŵ

ĂƐŚŇŽǁĨƌŽŵŝŶǀĞƐƟŶŐ ;άϯ͘εŵͿ ;άϬ͘ϳŵͿ ;άϬ͘ϳŵͿ ;άϬ͘ϳŵͿ

ĂƐŚŇŽǁĨƌŽŵĮŶĂŶĐŝŶŐ άϮ͘ϳŵ άϯ͘εŵ άϬ͘Ϭŵ άϬ͘Ϭŵ

EĞƚ/ŶĐƌĞĂƐĞ/ŶĂƐŚ ;άϭ͘ϮŵͿ άκ͘εŵ άς͘ϭŵ άϳ͘ρŵ

KǀĞƌĂůůĐĂƐŚŇŽǁ ;άϭ͘ϮŵͿ άκ͘εŵ άς͘ϭŵ άϳ͘ρŵ

zĞĂƌͲĞŶĚĐĂƐŚͬ;ĚĞďƚͿ άϯ͘Ϯŵ άΘ͘ϭŵ άϭκ͘Ϯŵ άϮϭ͘Θŵ

^ŽƵƌĐĞ͗ƋƵŝƚLJĞǀĞůŽƉŵĞŶƚ

ERGOMED’S LARGEST

SHAREHOLDERS

DŝƌŽƐůĂǀZĞůũĂŶŽǀŝĐ

;&ŽƵŶĚĞƌͬdžĞĐƵƟǀĞ

sŝĐĞͲŚĂŝƌŵĂŶͿ

Ϯκ͘Θκй

^ůĂƚĞƌ/ŶǀĞƐƚŵĞŶƚƐ ε͘εϳй

KĐƚŽƉƵƐ

/ŶǀĞƐƚŵĞŶƚƐ ς͘Θϭй

Strategic Equity

ĂƉŝƚĂů ρ͘Ϯκй

,ĂƌǁŽŽĚĂƉŝƚĂů ϯ͘ΘΘй

^ŽƵƌĐĞ͗ZĞƵƚĞƌƐ

(^1002015201620172018)
120
140
160
180
200
220
240
ERGOMED
FTSE ALL SHARE
Rebased to first Source: Thomson Reuters Datastream
BROKER SAYS: 2 0 0
LEVERS FOR GROWTH
Looking ahead, Ergomed
ĂŝŵƐƚŽŐƌŽǁŽƌŐĂŶŝĐĂůůLJ
ĂŶĚƉŽƐƐŝďůLJƚŚƌŽƵŐŚĨƵƚƵƌĞ
ĂĐƋƵŝƐŝƟŽŶƐǁŚŝĐŚĐŽƵůĚŚĞůƉ
ŝƚďƵŝůĚŽŶĞdžŝƐƟŶŐƐĞƌǀŝĐĞƐŽƌ
enter new territories.
/ŶůĂƚĞϮϬϭϳ͕ƚŚĞĐŽŵƉĂŶLJ
acquired contract research
ŽƌŐĂŶŝƐĂƟŽŶW^ZĨŽƌƵƉƚŽΦρ͘ϳŵ͕
ĂďƵƐŝŶĞƐƐǁŚŝĐŚƐƉĞĐŝĂůŝƐĞƐ
ŝŶƚŚĞĚĞǀĞůŽƉŵĞŶƚŽĨŽƌƉŚĂŶ
drugs for rare diseases.
The orphan drug market is
forecast to grow at a compound
ĂŶŶƵĂůŐƌŽǁƚŚƌĂƚĞŽĨϭϭй
ĨƌŽŵϮϬϭϳƚŽŚŝƚĂŶĂŶƟĐŝƉĂƚĞĚ
ΨϮϬϬďŶŝŶŵĂƌŬĞƚƐĂůĞƐďLJϮϬϮϮ͘
ƌŐŽŵĞĚŝƐĂůƐŽĂŶƟĐŝƉĂƟŶŐ
growth through its acquired
ďƵƐŝŶĞƐƐWŚĂƌŵĂĐŽsŝŐŝůĂŶĐĞ͕
ĂŵĞĚŝĐĂůŝŶĨŽƌŵĂƟŽŶƐĞƌǀŝĐĞ
provider.
ƋƵŝƚLJĞǀĞůŽƉŵĞŶƚĂŶĂůLJƐƚ
ůŝnjĂďĞƚŚ<ůĞŝŶƐĂLJƐŐƌŽǁƚŚŝŶ
WŚĂƌŵĂĐŽsŝŐŝůĂŶĐĞŝƐůŝŬĞůLJƚŽ
ďĞƐƵƉƉŽƌƚĞĚďLJDΘ͕ǁŚŝůĞŝƚƐ
ĂƵƚŽŵĂƟŽŶƐĞƌǀŝĐĞƐƐŚŽƵůĚůŝŌ
margins and expand premium
ĂĐƟǀŝƟĞƐ͘
According to Ergomed,
ĂƵƚŽŵĂƟŽŶŝƐůŝŬĞůLJƚŽ
ĐŽŵƉůĞƚĞΘϬйŽĨŵĂŶƵĂůĐĂƐĞ
ƉƌŽĐĞƐƐŝŶŐďLJϮϬϮϬ͕ŚĞůƉŝŶŐƚŚĞ
ĐŽŵƉĂŶLJĐŽŵƉĞƚĞǁŝƚŚůŽǁͲĐŽƐƚ
ƉƌŽǀŝĚĞƌƐŽĨƉŚĂƌŵĂĐŽǀŝŐŝůĂŶĐĞ
ƐĞƌǀŝĐĞƐ͘;>D:Ϳ