Medeva's 1994 Results Crown Five Years Of Growth

Medeva's share price rose to 196 pence last week on the back of its announcement of better-than-expected financial results for 1994 (Marketletter March 20). This takes the firm's shares nearer to the 200 pence plus level at which they were in 1993 before the price collapse that resulted from a profits warning. The warning was prompted by difficulties that occurred in the USA, mainly at Medeva's International Medication Systems unit (Marketletters passim). It is also a sign that investor confidence is returning.

Analysts at Goldman Sachs International in the UK raised their forecasts slightly, and continue to rate the company a market outperformer. On the new forecasts, the shares are trading at only 10 times 1996 earnings, with forecast five-year average earnings per share growth of around 12% a year. The analysts say that the shares should also continue to benefit from positive sentiment following the news on its hepatitis B vaccines (Marketletters passim) as well as the 1994 results.

For 1995, estimates for pretax profits rise from L68.6 million ($109.1 million) to L71.3 million and EPS increases from 14.7 pence to 15.5 pence. In 1996, pretax estimates rise from L76.9 million to L80.6 million and EPS from 16.5 pence to 17.5 pence. And for 1997, the estimates for pretax profits increase from L88.3 million to L92.9 million and EPS from 18.8 pence to 20.1 pence.