Biotech Sirtex Medical, which is subject to a $1.6 billion takeover proposal from Varian Medical Systems of the US, has lifted its first-half net profit by 13 per cent and maintained its earnings guidance for the full year.
The developer of an internal radiation therapy for liver cancer made a net profit of $23.5 million in the six months to December 31, with a restructure undertaken in June boosting its margins.
“We are delighted with our first-half financial performance, which represents a substantial turnaround in the profitability of the business,” chief executive Andrew McLean said in a statement.
The company’s pre-tax earnings margin improved to be back over 30 per cent of sales, he said.
“It is particularly pleasing to have accomplished such leverage in the relatively short amount of time since we restructured the business in June,” Mr McLean said.
Revenue was down three per cent on a year earlier due to a weaker US dollar and slightly lower dose sales of the company’s treatment.
There was also a change in geographic mix, with stronger growth recorded in lower price markets in the Asia-Pacific region.
Sirtex said it will prioritise initiatives to boost sales while also containing costs.
The company maintained its previous guidance for pre-tax earnings of $75 million to $85 million in the 2017/18 financial year.
Sirtex said it is still preparing documents to support the scheme of arrangement with Varian, and a meeting of Sirtex shareholders to consider the Varian takeover proposal is expected in May.
Sirtex shares were down 4.5 cents at $27.695 at 1205 AEDT.
IMPROVED MARGINS LIFT SIRTEX’S HALF YEAR PROFIT
* Net profit up 13.2pct to $23.6m
* Revenue down 3pct to $109.4m
* No interim dividend, unchanged