Icon profits up 17% to €86m

IRISH pharmaceutical services company and clinical trials specialist, Icon, has reported a 17% increase in full-year operating profit to $116 million (€86m) for last year.

Net revenue also rose by 3% to $888m.

Full-year diluted earnings per share amounted to $1.53, 18% growth on the previous year.

The final quarter of last year saw a 14% rise in earnings per share, a 3% year-on-year rise in net revenue and a 12% increase in operating profit to just under $30m.

The company also benefited from some $229m worth of new business gains in the final three months of the year.

Icon’s chief executive, Peter Gray said that management was pleased with the performance, in what was “a challenging year”.

Mr Gray added that the Dublin-headquartered business is guiding towards revenue of between $890m-$940m and earnings per share of between $1.44-$1.60 for the current year.

“With our backlog at $1.84bn and with a strong balance sheet, we have entered 2010 in a good position.

“While external factors are challenging, and many governments are endeavouring to reduce healthcare costs, including pharmaceutical prices, we remain positive – though cautious – as the year commences,” he said.

In a research note on Icon, published yesterday, Davy Stockbrokers’ Jack Gorman said: “Given the circumstances which faced the CRO [contract research organisation] sector during 2009 – economic headwinds, client consolidation and healthcare reform – Icon’s delivery of modest revenue growth and high-teens EBIT growth represents an exceptional performance. Almost $200m of free cash generation should also not be ignored.

“This allows Icon to invest organically and externally during 2010 to augment returns. End of 2010 cash levels could top $270m or around 20% of the company’s market capitalisation.”