Icon upgraded as revenue growth exceeds 30% again

Brokers yesterday upgraded clinical trials group Icon following another quarter of record results.

The results, which came in ahead of forecasts, marked the sixth successive quarter of revenue growth to exceed 30 per cent.

Operating profit grew by 43 per cent in its second quarter to $6.3 million (€6 million), with earnings per share (EPS) ahead 29 per cent at 36 US cents, two cents ahead of forecasts. In the first half, profits have climbed 23.6 per cent to $8.4 million. The company also issued upbeat guidance for the rest of the year.

Irish analysts moved quickly to raise projections for the rest of this year and for 2004.

Stockbrokers Goodbody and Merrion raised the full year earnings per share figures 3.5 per cent to $1.49 from $1.44, with house broker Davy forecasting earnings of $1.48, up from $1.43. For 2004, Merrion raised the EPS bar to $1.86 from $1.80. The new figures would represent earnings growth of 29.5 per cent this year and 25 per cent in 2004.

Analyst Mr Peter Frawley said he was confident the company could deliver 25 per cent growth in earnings per annum in the medium term.

Sales in the second quarter rose 42 per cent to $53.5 million, underpinned by organic growth in sales of 32 per cent, boosted by contributions from recent acquisitions.

In the first six months of its financial year, Icon has seen sales rise 36 per cent in the first six months of the year.

Commenting on the figures, Icon's chairman, Dr John Climax, said the company remained "very confident in the outlook for the current fiscal year and beyond".

He cited Icon's recent success in winning new business - it secured $67 million in net new business during the quarter under review - and continuing strong industry fundamentals.

Icon, along with other clinical trials groups, is expected to profit under efforts by the US Department of Health and Human Services to give the Food and Drug Administration authority to require pharmaceutical companies to conduct paediatric trials of their products.

Dr Climax said the company was happy with operating margins, which returned to 11.8 per cent from 11.7 per cent a year earlier.