A Sneak Peek into Financial & Operational Updates of 2 FTSE Listed Stocks: Amryt Pharma Holdings Ltd & Victrex Plc

The United Kingdom market headed north with the opening bell (on 11^th May 2020, before the market closed), since the investor sentiments are optimistic with the gradual restart of activities. Even the Global markets responded positively as more economies are easing lockdown restrictions. Today, we are going to discuss two FTSE listed stocks from varied industry – Amryt Pharma Holdings Ltd (LON:AMYT) and Victrex PLC (LON:VCT) as both the Companies have released their financial update. While AMYT posted its full-year FY2019 and Q1 FY2020 results, VCT announced the half-yearly results. Following the business updates, the stock price of both AMYT surged over 2.4 per cent, whereas VCT dipped around 0.76 per cent (at the time of writing, 9.20 AM GMT). Both the Companies reported decent growth in revenue in the last operating period, while VCT is anticipating COVID-19 headwinds in the second half of its financial year. Let’s skim through the financial and operational position of these two Companies and gauge, how they are sailing in the current headwinds and bringing positivity to the market sentiments despite prevailing economic disruption.

Amryt Pharma Holdings Ltd (LON:AMYT): Performance boosted after US deal; Decent revenue growth trajectory with strong pipeline

Amryt Pharma Holdings Ltd is a FTSE AIM All-Share listed commercial-stage biopharmaceutical company. It is focused on developing and commercialization of new treatments to enhance the lives of orphan and rare diseases patients. It holds a portfolio of development and commercial assets. Company’s commercial business has two orphan disease products - Juxtapid®/ Lojuxta® and Myalept® / Myalepta®. Further, the lead development candidate is FILSUVEZ®.

(Source: Presentation, Company Website)

Company Highlights – Depicting the Strength of Amryt

• Generated around USD 154 million of revenue from two commercial products in 2019.
• Completed the acquisition of Aegerion before the schedule.
• Solid balance sheet provides financial flexibility to launch pipeline and acquire additional assets.
• Multiple expansion opportunities for the approved products in additional geographies and indication.

(Source: Presentation, Company Website)

Significant Updates for 2020

• 7^th May 2020: The Group announced FILSUVEZ® as a brand name for its product AP101. The product is focused on developing a potential treatment for Epidermolysis Bullosa (EB is a rare skin disorder).
• 23^rd April 2020: The Group decided to close the EASE study due to the COVID-19 disruption while the patient recruitment was near the conclusion.

Q1 FY2020 Highlights (for the first quarter ended March 31, 2020) - Reflecting Robust Revenue Growth and Delivering Positive EBITDA

• For the first quarter of 2020, the unaudited revenues increased by 30% to $44.6 million as compared with the corresponding period of the last year (Q1 FY19: $34.3 million), while the group has seen 10% quarter on quarter unaudited revenue growth in Q1 FY20. The increase in revenue was driven by the growth in Myalept® / Myalepta® (metreleptin) and Juxtapid®/Lojuxta® (lomitapide) revenues as well as AMYT showed growth in the US, EMEA, and ROW revenues.
• The company delivered EBITDA, after adjusting for these non-cash items, of $4.6 million in the last quarter. For Q1 FY20, the operating loss before finance expense, including on-cash items and share-based compensation expenses, stood at $17 million.
• During Q1 FY20, the cash generated from Operating Activities was reported at $6.2 million. Aegerion integration successfully accomplished ahead of schedule. This shows that the business is significantly EBITDA positive - a quarter ahead of plan.
• Amryt Pharma delivered a robust financial position, with an increase in cash ($67 million) as compared with the previous year (31 December 2019: $65.2 million).

(Source: Quarter Results, Company Website)

FY2019 Highlights (for the year ended 31^st December 2019) – Well-Positioned to Execute on the Strategy

• In the latest financial year 2019, the company showed good growth and transformational year of performance, with an increase in unaudited combined revenues of 13.1% and the total reported revenues rose to $58.1 million.
• In August 2019, the business raised $8 million of gross proceeds through an interim equity placing.
• On completion of the Aegerion acquisition in September 2019, AMYT raised an additional net of fees of $57 million by way of an equity placing. This compares to the year-end (31^st December 2019) unrestricted cash balance of $65.2 million, which was significantly ahead of anticipations and reflected the robust performance in FY19 since the acquisition of Aegerion.

(Source: FY19 Results, Company Website)

Share Price Performance

Daily Chart as of May 11th, 2020, before the market close (Source: EODHD/Others, Thomson Reuters)

AMYT’s shares were trading at GBX 110 on 11^th May 2020 (before the market close at 8:58 AM GMT+1). Stock's 52 weeks High is GBX 143.00 and Low is GBX 72.75.

Short Term Scenario

2019 was a transformational year for the group, while Amryt has also shown positive momentum in Q1 FY20. Presently, the company is on-track to execute on the strategy of becoming an international leader in orphan and rare diseases and delivering therapies to patients with high unmet needs. The current performance so far is beyond anticipation this year 2020 as the business grows and performs across a host of metrics. Looking forward, the company’s top-line data readout from the EASE (a pivotal Phase 3 prospective double-blind randomised placebo-controlled) study in late the third quarter or early fourth quarter which will represent a substantial milestone for AMYT. The group does not see any impact on the supplies, due to COVID-19 outbreak.

Victrex PLC (LON:VCT) – Polymer Maker anticipating Covid-19 headwinds in H2

Victrex PLC is a FTSE 250 Company, which provides high performance polymer solutions. It caters the markets of energy, automotive, aerospace, medical and electronics. The Company serves in over 40 countries with over 900 employees. The Group generates around 98 per cent of revenue from sales outside the United Kingdom.

(Source: Company Website)

Highlights of Key Performance Indicators against the Strategic Priorities

• In 2019, The Group further boosted up its R&D spend at around 6 per cent of Group revenue to GBP 18 million in FY2019 as against GBP 17.4 million in FY2018. It underpins the Group’s potential to generate growth in the future.
• New products generated 4 per cent of Group sales in FY2019, which has been flat since FY2017.

(Source: Company Website)

Vital Regulatory Updates of 2020

• 3^rd April 2020: The Board of Victrex announced the appointment of Ros Rivaz as Non-Executive Director and Senior Independent Director from 1^st May 2020.
• 13^th January 2020: The Group announced the joint-venture of its hong kong based subsidiary with Yingkou Xingfu Chemical Company for PEEK polymer facility.

Interim Results 2020 (for the 6 months ended 31 March 2020) – Reflecting Solid Growth but Emerging Headwinds in Second Half

• The company delivered solid growth in the first half of 2020, with growth in Auto & Medical and stable performance in Aerospace & Electronics.
• Some key highlights that reflects H1 performance: H1 sales volume increased by 5%, offset by weakness in Energy; Q2 volume rose by 4% against tougher comparatives; Group revenue surged by 4% (up 3% on a constant currency basis) to £151.5 million (good progress in Medical, revenue up 6% to £29.5 million; further growth in Asia and new applications); Underlying PBT stable at £52 million; margin impacted by weaker operating leverage from lower production and special grade campaigns.
• VCT delivered a strong financial position, with H1 net cash of £53.2 million, operating cash conversion of 85%, and committed and undrawn RCF (Revolving Credit Facilities) of £20 million.
• In the Automotive division, the company has shown good growth in Europe & Japan. VCT has a strong start in Aerospace division, offset by 737 Max headwinds. In H1 FY20 sales volume for Energy & Other Industrial reduced by 1%, compared to H1 2019 (Oil & Gas down 11%). In H1 FY20, the volume of Electronics division tumbled 4% (compared to H12019); weaker Semiconductor performance offset by growth in Small Space Acoustics & Home Appliances. The group has Launched of new grade DBX film in Electronics Division.
• In light of COVID-19, the company has implemented cash conservation measures, with UK debottlenecking capex deferred, Bonus accrual removed, and Interim dividend deferred. Victrex has a healthy net cash position & £40 million facilities (RCF undrawn).

(Source: Interim Results, Company Website)

Share Price Performance

Daily Chart as of May 11th, 2020, before the market close (Source: EODHD/Others, Thomson Reuters)

VCT’s shares were trading at GBX 1,968 on 11^th May 2020 (before the market close at 9:00 AM GMT+1). Stock's 52 weeks High is GBX 2,574 and Low is GBX 1,645.

Business Outlook Scenario

Q3 to date has been broadly in line with the anticipations. In the forward order book, the company is now seeing uncertainty created by COVID-19, particularly in Automotive and Aerospace, with Energy & other industrial was impacted by weaker oil & gas market. As per the geographical region, the demand outlook is becoming more challenging in Europe and the US and some more normalised demand returning in Asia, which could prove supportive. The inventory levels are high, and the supply chains stay effective. Further, amid challenging times widely emerged by COVID-19 outbreak, VCT prudently implementing measures to reduce cost and conserve cash, whilst maintaining strong service levels for customers. The company has deferred UK capital expenditure debottlenecking programme to FY2021. However, China’s capacity investment is expected to continue as planned, and the group is unable to provide detailed guidance on full year.