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.
Companies: Elekta (EKTA-B:STO)Elekta AB Class B (EKTA.B:OME)
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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In its first Litmus test after an ‘ambitious’ CMD in June 2021, the British giant has put up a decent show. The group witnessed recovery in the base business, particularly in vaccines which benefited from the sales of COVID-19 vaccine adjuvant. While the near term continues be tricky due to resurfacing COVID-19 concerns, encouraging trends on the COVID-19 vaccine / treatment front and growing HIV and oncology prowess should calm the nerves.
Companies: GlaxoSmithKline plc
Cambridge Cognition has released a very encouraging H1 update which was well ahead of our forecasts and we have upgraded our FY21 revenue estimate by +19%. Order intake in the period leapt +74% to £8.6m (H1 2020: £4.9m), including £6.4m of previously-announced large orders, including two very significant wins totalling £3.6m. H1 revenues rose +50% to £4.5m, well ahead of DCe £3.8m and the group delivered Adjusted EBITDA of £0.2m vs DCe breakeven. Customer prepayments from contracts resulted in a
Companies: Cambridge Cognition Holdings Plc
ANGLE announced its second pharma services contract with an undisclosed drug development company, using Parsortix firstly to develop two custom CTC assays to look at biomarkers of DNA damage repair, for which it will be paid c.$0.4m and, secondly, if successful, to use these validated assays for longitudinal analysis in a subsequent clinical trial planned to start in H2 2022. The revenue from the first phase of the contract is expected to be recognised over a 12-month period. ANGLE also confirme
Companies: ANGLE plc
In Q2, Astra reported strong sales growth momentum, (again) driven by a strong showing in oncology, diabetes drug Farxiga and COVID-19 vaccine sales. Although there were some issues in R&I and CVRM. More importantly, at cost vaccine sales and mandatory VBP discounts in China weighed on profitability. While the profitability strain can sustain in H2 as well, one should find confidence from the robust potential of core pharma offerings and the addition of high-growth and excellent-margin Alexion,
Companies: AstraZeneca PLC
A positive trading update for H1 2021 prompts full-year upgrades to forecasts and provides the basis for the introduction of FY 2022 forecasts. H1 2021 sales orders increased 74% to £8.6m; up from £4.9m in H1 2020, with a 50% increase in revenues and a £0.5m increase in adjusted EBITDA to £0.2m. A record contracted order backlog (up 36% or £4.0m from 31 December 2020 to £15.2m), which contains several large contracts with revenues to be recognised over up to six years, provides improved long-ter
Smith & Nephew reported consensus beating Q2 21 sales growth of 40.3%, thanks to a strong recovery in Orthopaedics (+43.4%) and ‘sports medicine & ENT’ (+50.9%). Regionally, growth was driven by the established markets (+46.8%).
For H1, revenue growth came in at 27.8% with a trading margin of 17.6% (+920bps, 40bps ahead of consensus). Guidance of 10%-13% top-line growth and an 18%-19% trading margin was re-iterated.
Following the broadly in-line performance, we do not expect any significant ch
Companies: Smith & Nephew PLC
What a difference a year makes - 12 months ago, the focus, quite understandably, was on the course of the pandemic and the lifting of the Lockdown (1) measures. For investors, it was the sustainability of the rally in markets seen since March 2020. Today, while we are still thinking about the lifting of lockdown measures, we are also concerned about two “old favourites” from previous decades. Inflation and the parlous state of public finances. The BoE has said that although CPI inflation rose to
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Doctor Care Anywhere Group's (DOC) Q221 update highlights that underlying revenue has continued to increase, driven by its expanding internet hospital and subsequent growth in diagnostic referrals. Management remains confident that FY21 revenue will be at least 100% above FY20 levels, implying a total revenue of at least £23.2m. Its balance sheet remains strong with net cash of £31.5m. The expected Q421 launch of its digitally integrated virtual and in-person primary care service with Nuffield H
Companies: Doctor Care Anywhere Group PLC Shs Chess Depository Interests Repr 1 sh
In our second edition of “Trend spotting” we note how in the last three weeks the defensive rotation trend has gathered pace and further evidence has emerged of the “relative fading” in the UK economy. However we now see early signs of the “risk on” trend starting to reassert itself in equity markets and we look at small cap laggards plus European exposure as ways to play this.
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SDL delivered a better than forecast H1, outperforming sales and AOP estimates. Revenues moderated by just 1% to £180.7m, with AOP up 1% to £16.3m. Increased demand from strongly performing verticals (Online Retail, Technology) has offset declining volumes from CV19 impacted sectors (Leisure, Travel, Automotive). KPIs continue to move in the right direction, with ARCV rising 7% y/y, and Linguistic Productive Utilisation stable at 67%. The Group delivered 60 new technology customer wins in H1, an
Companies: RWS Holdings plc
Warpaint’s interim results for FY2020 reflect the impact from Covid-19, with revenues of £13.5m, down 29% year-on-year (yoy) and adjusted profits from operations of £0.4m. Importantly, net cash has improved to £3.8m, up from £2.7m at the end of December 2019. We highlight the outlook statement, in particular, the recovering revenue in H2, the proposed interim dividend of 1.5p, together with an additional 1.3p to reflect no final dividend was paid for 2019, as signs of confidence from the Board.
Companies: Warpaint London PLC
Q4 trading has led sales to guidance being raised 8%. This has been driven by better than expected UK sales, incl. success with new customers like Wilko/Tesco. Some of the benefit is offset by a non-cash FX debit, but it still leads to an upgrade and higher net cash. As a result of successful trials in Tesco Express, W7 is also being rolled out to 469 more stores. This, and previously announced distribution gains, bodes well for incremental sales/PBT in 2021, and underlines the appeal of its val
With the audit process having been further complicated by the impact of the pandemic, ECO’s delayed results for the year ending Mar-20 and the half year ending Sep-20 have now been published. In headline terms, they are both very much in line with expectations. As previously discussed, trading suffered in H1-20 as the African Swine Fever outbreak in key market China impacted on demand. H2 was significantly stronger (60% of FY20 revenues) and that momentum has continued into FY21, with two signif
Companies: ECO Animal Health Group plc
AMTE Power, a developer and manufacturer of lithium-ion battery cells for specialist markets, announced its intention to seek admission to trading on AIM. Admission is expected to take place during March 2021. The Company intends to raise approximately £7 million by way of a placing of new ordinary shares in the capital of the Company. Timing TBC. Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world's largest market for brands and retailers, intend
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