ICON Q3 profits surge by 42% to $8.8m

ICON, the listed clinical trials company, has reported a 42% surge in third quarter pre-tax profits helped by a strong pipeline of new business wins.

The company, which undertakes clinical research for biotech and pharmaceutical companies, said the three months to end February pre-tax profits had risen from $6.3 million to $8.8m.

Third quarter revenues rose by 29% to $76.8 million.

The company's chairman, Dr John Climax, said Icon's clinical business performed well and the laboratory business showed good improvement.

“We achieved a very good level of new business wins and made excellent progress with our working capital management, which resulted in strong cash flows,” Dr Climax said.

Earnings per share in the quarter came in at 49 cents from 39c at the Q3 stage last year.

For the nine months to end February, ICON's financial performance continued to improve.

Revenues were up from $159.7 million to $219m, while pre-tax profits rose from $18m to $24.9m. EPS for the nine months was up 31% at $1.45.

The company said that during the third quarter $91 million worth of net new business had given a positive outlook for the year.

“Net new business wins in the quarter were $91 million, which was a substantial increase over the previous quarter and our backlog has benefited.

“Nonetheless, we continue to be focused on our business development efforts to ensure that momentum will be maintained into our new fiscal year,” Dr Climax added.

Ahead of the results publication yesterday Davy Stockbrokers analyst Jack Gorman said: “We have long argued that any weakness in the stock can provide an opportunity to add to long-term weightings in ICON.

“We continue to hold this view, recognising that short-term earnings remain reliant (as always) on the level of wins that the company reports today.”