Impact of recovering markets was evident in Elekta’s Q1 sales growth and adjusted order intake numbers. However, the material weakening of margins came as a surprise. While the re-emerging pandemic risks are guided to result in near-term margin pressure, the firm remains on track to unlock healthy sales growth opportunities. Moreover, with better-margin products expected to pick up momentum, the margin progression story remains intact. Add on top the expected recovery in oncology markets, and ou
Companies: Elekta (EKTA-B:STO)Elekta AB Class B (EKTA.B:OME)
Driven by a growing presence in the underserved emerging markets and an increasing proportion of faster-growing software/ service business in the total mix, Elekta’s sales momentum is set to accelerate in the mid-term. Moreover, innovation and strategic partnerships with industry bigwigs should ensure a sustained market share gain. Top-line growth will be accompanied by margin expansion on the back of operational leverage and efficiency gains, with Unity leading from the front.
Sales momentum decelerated in Q4 as installations took a hit, especially in emerging markets. Profitability came under pressure impacted by higher supply chain and service costs. However, Elekta’s order intake surged 18%, comfortably outpacing the market leader. As pent-up demand is now being unleashed, positive order growth is here to stay. Moreover, as the market situation continues to recover, Elekta’s ability to install systems should improve, thereby pushing up sales. Details on the new mid
Sales momentum accelerated in Q3 driven by improving market conditions and better access to customers’ installation sites – the solutions business grew faster than services business. Geographically, Asia-Pacific led the pack and the Americas returned to growth, though recovery lost pace in EMEA. Notably, profitability was hit by higher supply chain costs and an unfavourable product mix. Although the gross order intake was back in the black, it missed expectations with EMEA playing spoilsport. Gi
Despite the challenging market conditions, Elekta outperformed its rivals in Q2 – in both terms of revenue and order growth. Operating profitability reached a new high driven by a favourable product mix and strict cost management. Although Q3 could be negatively impacted due to the new wave of lockdowns, a new product launch, Harmony, which complements Unity, could enable Elekta to outgrow the market when a rival is undergoing an integration phase. The new reimbursement model could also be favou
Companies: Elekta AB Class B
Elekta’s Q1 results showed resilience in challenging market conditions. While the top-line benefited from higher service revenue and double-digit growth in China, profitability outperformance was driven by a favourable product mix and strict cost management. Importantly, in the weak radiotherapy market, gross order intake was in the black on the back of a big order from GenesisCare in the US. With Unity now in the growth phase of commercialisation and a new linac around the corner, Elekta’s mid-
Benefiting from the super-rich valuations offered by Siemens Healthineers for the proposed acquisition of Varian Medical, Elekta, a direct competitor, surged c.15% yesterday. With the No.1 player in the oligopolistic radiation therapy market now grabbed, there is a possibility that the No.2 player, Elekta, might also be grasped by an industry bigwig. In our view, Royal Philips, which has been a strategic partner for Elekta, might be interested in the family-owned business in the mid-term.
While Q4 sales and order intake growth were affected due to limited access to hospitals, the speed-up of installations in April meant that FY19/20 targets were over-achieved. Positive sales development in the US and the resilience of the services business, thanks to digitalisation, also played a part. Although order growth could be under pressure in H1 20/21 – as hospitals trim their capex – Elekta’s healthy order backlog should ensure steady revenue in FY20/21. The big order from GenesisCare an
Sales missed expectations in Q3 due to the delay in installations of linacs in the US. Order intake was also weak with the US being the main drag. However, the new regional manager’s aggressiveness could put the US back on track. Also, given the robust sales funnel of Unity, the 75 units order target could be achieved three months early. While margin expansion also remains on track, driven by an improving product mix and the cost-cutting programme, Coronavirus is a near-term threat.
Elekta, a market leader in radiotherapy, is set to outgrow the industry in the mid-term – driven by potential pick-up in demand for its new linac (Unity) and expected orders from China. Moreover, with robust margin expansion potential – led by an increasing proportion of Unity and software/service revenue and targeted cost-savings – earnings should grow healthily. Throw on top a sturdy balance sheet and a consistently-increasing dividend flow, Elekta is attractive at current levels. We initiate
The cancer burden is growing globally. Each year >18 million people are diagnosed, nearly 10 million die and the estimated economic cost exceeds $1 trillion. From early diagnosis to late-stage disease, cancer care often involves inappropriate or unnecessary interventions that drive costs but provide limited clinical benefit. Coupled with an increased understanding of cancer biology and rapid technological advances, this has been driving momentum for precision medicine, leading to patient and soc
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Full-year results were in line with the trading update of 21 July, with revenues of £31m (-2%), reflecting the impact of COVID-19 on out-patient procedure rates, resulting in 14% and 24% declines in adjusted EBITDA and pre-tax profit, respectively. Lower than expected procedure growth rates and the decision to discontinue non-core (non-chlorine dioxide products) reduces forecast revenues by c.£3m to £33m in FY 2022. However, higher gross profit and tight control of costs (+6%) results in an unch
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Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie 'Publisher of the Year 2021' by GamesIndustry.biz. Offer TBA. Due early Nov.
Life Science REIT to join AIM raising up to £100m. This will be the first London listed real estate investment trust (REIT) focused on UK life science properties providing investors with exposure
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Recruitment resumed the Phase 2a trial of the lead programme hRPC in retinitis pigmentosa (RP) with the treatment of the first UK-patient in Oxford. The protocol gives greater infection control after the safety issue (a possible infection) in June. Five patients were treated up to mid-October and the remaining four could be treated by December 2021. By late March 2022, ReNeuron expects to give an interim update. The full data set should be available around mid-2022. This will enable regulatory d
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Arrow Exploration Corp. (AIM: AXL ; TSXV: AXL) , the oil and gas exploration and production company, has conditionally raised approximately £8.8m and is due to complete its dual listing on AIM on 25 Oct. Market cap c£13.1m.
Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie 'Publisher of the Year 2021' by GamesIndustry.biz.
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IXICO has announced that one of its clients has put an indefinite halt on a clinical trial for which the company was providing its artificial intelligence medical image analysis. The halt is the result of unexpected preclinical data. IXICO had expected the contract to deliver £0.8m of revenues in FY22E and it represented £3.3m of the £18.8m order book as of the close September 2021. While this news is disappointing, clearly the trial halt has no reflection on the capability of IXICO's technology
Companies: IXICO Plc
IXICO has provided an upgraded trading statement for FY21E following its previous update in August 2021. Revenues are now expected to be £9.2m (vs £8.7m previously), broadly in line with FY20A, which we see as a strong result given the pandemic and Huntington's Disease (HD) trials de-scope. EBITDA is expected to be materially ahead of FY20A's £1.3m, supported by strong Q4/21 trading, cost control and positive one-offs. The company has ended FY21 with a strong order book (£18.8m) and cash positio
CareTech is a specialist social care and educational services provider. This morning, the group has announced an update for the year to 30 September pointing to the fact that results will be in line with market expectations. The net debt position of £259m illustrates a further reduction since the end of H1 (31 March £263.1m) and implying a reduction to 2.7x adjusted EBITDA. During the year, seven new developments have opened, with a further eight properties purchased in H2. The group's freehold
Companies: CareTech Holdings PLC
SkinBioTherapeutics has announced it will launch its lead commercial product, AxisBiotix-Ps on World Psoriasis Day, 29 October 2021. To support the launch, the company has begun to receive, and store finished product in the Netherlands (close to its manufacturing partner) ahead of initial launches in the UK and US. Clearly the launch of its first product is a significant step for SkinBioTherapeutics, marking the transition from development company to commercial operation. We are encouraged by th
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Synairgen reported interim results to 30 June in which the adjusted net loss was £32.8m with period-end cash of £46.2m. Substantial pre-commercial progress and manufacturing activities have made in the half, although slower country approvals for trial sites will result in Phase III data readout slipping into Q1 2022. With increasing evidence of the need for a broad-spectrum antiviral delivered to the lungs and recognition that vaccines don’t provide complete protection against hospitalisations d
Companies: Synairgen plc
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Light Science Tech Holdings, the controlled environment agriculture technology and contract electronics manufacturing Group to join AIM. Raising £5m. Expected mkt cap £17.4m. Due 15 Oct.
Harmony Energy Income Trust to join the Specialist Fund Segment of the Main Market raising up to £230m. The Company's investment objective is to provide investors with an attractive and susta
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The positive market research results for Eroxon®, released this morning, provides further support for the company’s ongoing partnering efforts. We continue to believe that MED2002 is a differentiated product with significant potential in both prescription and OTC markets, and look forward to further PK data followed by Phase III start in H1 2018.
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Hikma’s H1 20 top-line acceleration was driven by COVID-19-related demand in Injectables and Generics and the economic recovery in Algeria propelled growth in the Branded segment. Combined with a favourable product-mix, the operating margin was up 1.5ppt. In the near term, new launches across segments should provide some respite against the ongoing pricing pressure. Given the company’s thin R&D pipeline and a robust balance sheet, M&A (probably in the biosimilars space) seems on the cards.
Companies: Hikma Pharmaceuticals Plc
The oncology consultancy using mathematical models to support the development of cancer treatment regimens and personalised medicine solutions yesterday announced it has entered into a partnership with Tabula Rasa HealthCare® (TRHC) (NASDAQ: TRHC), a healthcare technology Company advancing the field of medication safety. Through this initiative, Physiomics' personalised docetaxel model will be integrated into TRHC's market-leading precision dosing solution, DoseMeRx®. Both parties expect positiv
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Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world's largest market for brands and retailers, intends to IPO on the Apex Segment Aquis Stock Exchange Growth Market. Admission is targeted for March 2021. Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard) this spring. Target valuation £20m raising c. £8m “to finalise the development and launch
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